Rent to Own Homes

Pros and Cons of Rent to Own Homes in Worcester MA

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Housing is the most basic commodity for every person. Choosing and living in your dream house can simply be amazing. Unfortunately, not everyone can live up to their dreams. There are people who simply cannot afford to buy a new house due to a lack of financial capability. This is the main reason why many people simply prefer to rent because the sad reality is that owning a new house is considered a luxury for many people.

Fortunately, some people find ways to own their dream house by choosing rent to own homes. if you live in Worcester, MA, and you really want to own a house, you should try to this method. Many times, people often choose to rent rather than own a new house because it much cheaper.

Choosing rent to own homes in Worcester, MA is a very good investment because it is practical and convenient. However, choosing this option does entail some drawbacks. Knowing the pros and cons of owning rent to own homes is a very wise step towards home ownership.

Here is some helpful insight that will help you to weigh your options when choosing to buy rent to own homes:

Pros of Rent to Own Homes

Rent to own homes is a very good start if you are planning to move to Worcester, MA. It will give you the option to take the time to find your dream home if this option does not fit into your lifestyle. It will also allow you to know your neighborhood better.

One of the greatest benefits of choosing rent to own homes is that you do not need a  high credit score. It is common for banks to require a 20% to 25% down payment before you can purchase a property. In addition, most of these properties require mortgage insurance as well. Choosing rent to own homes gives you the chance to review your financial situation so that you can take the time to decide if this option will improve your financial capability. Lastly, this option gives you ample time to think seriously about if your chosen house will actually become your dream home.

Cons of Rent to Own Homes

As mentioned earlier, there are also some drawbacks when choosing rent to own homes. First, it is most likely that the payment for rent to own homes are more expensive than the market value of renting a regular home. The reason for this is that the money you pay for rent is actually part of the down payment you pay for the house. Another point to consider is the chance that the you will have to spend a lot of money on repairs for the house. The maintenance cost may be much higher than buying a new house outright. As a result, you should check your financial status to know if you can maintain and buy a house in 2 to 4 years’ time.

Choosing the right house for you and your family is just as important as the method of payment you choose since Worcester, Massachusetts is a very beautiful city to live in. If you are on a really tight budget and do not have enough money to spend on a down payment or have a bad credit record, then rent to own houses will be the ideal option for you. Whatever option you chose, make sure that you only deal with a reputable broker because it will help you decide if choosing this option is a good decision.


Rent to Own Homes in Massachusetts – How Does it Work?

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For many practical home buyers, a rent-to-own home may be the best option. This is also called a lease-to-own house and the process is similar to a car lease. Renters pay a certain amount every month to live in the house and at the end of the agreed period (usually it is within three years), they have the option to buy the house.

This is why both renters and sellers need to be transparent about the contract. They have to agree with all the terms that they come up with. Rent to own homes in Massachusetts has advantages and disadvantages for both parties. Buyers have the chance to purchase a new house and the seller is relieved of mortgage payments. This is the best option for buyers who cannot afford to purchase their own home.

The Rent-To-Own Process
Before entering into an agreement, sellers must decide on the sales price as well as the charge for the rent. Both amounts are subject to negotiation just like a regular sale. However, sellers and buyers must remember that once the contract is signed, the sale price of the house is locked until the end of the lease term that is agreed upon. This is normally between one and three years. Even if the prices of other houses increase or decrease during this time, the original agreed upon price is constant. It does not change. Rent to own homes in Massachusetts should always have this type of agreement.

Renters can also pay an option fee and rent premium. The option fee is a set amount that the renter pays the seller. If the renter purchases the house at the end of the period, the option fee becomes part of the down payment. If not, then the option fee is the income for the seller. Rent premiums are amounts that are slightly above typical rent prices, with a portion of that money going towards the down payment.
For buyers who don’t have a qualifying credit score or enough money to purchase a home, they can opt for the rent-to-own option. Sellers are also eager to relieve themselves of the burden of an old home so they can earn money even if they sell the house or not. Once the leasing period expires at the end of the contract, the renter can choose to buy or not buy the house. If a buyer chooses not to buy the house, the seller keeps all the money.

Deciding Whether This is the Best Option
Purchasing a home is one of the biggest decisions anyone can make in their life. Some people do not find it practical to spend money on a home or apartment that you will not own in the long run. Many people believe that it is better to save the amount spent on rent and use that money for a future mortgage. For renters who do not have no other options, this is the way to go. Rent to own homes in Massachusetts provide renters and sellers with this option.

The key is knowing if this option is right for the individual. Renters may think right off the bat that it is a good decision, but in the long run, renting to own costs more than just renting an apartment. Therefore, it is best that all bases are covered before renters and sellers sign a contract that neither party can back out of in the future.

Lease to Own Homes in Worcester MA : An Option to Consider

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When talking about rent to own,  there are those who do not understand what it is about.  Basically,  renting to own a home is much like leasing and it works in different ways. For instance, tenants can choose to rent for a set period such as a year. When the year is up, they have the choice to purchase their home. A portion of their rent is credited to the sale price of the home that the renter is buying.

Tenants can also buy the property for a pre-determined price when their lease ends as long as they make a downpayment which is non-refundable. After this transaction is done, the tenant is not contracted to purchase at the end of the lease. However, the property owner cannot sell it to anyone else. If you want to rent to own homes in Massachusetts, these are the options that have to be considered.

Option for Individuals with Bad Credit
For those who have credit trouble, this option definitely appeals to individuals who wish to become homeowners but have little or no savings for the down payment. This is also appropriate for people who have no credit or bad credit and not qualified for traditional mortgages. The latter group includes those who have lost their homes in foreclosure or had a negative experience with rent-to-buy contracts. Renting to own is a way to get into a desired neighborhood. It is a way to get into a house and not commit to decades of mortgage payments. This is a great option for those who wish to buy lease to own homes in Worcester MA.

Pros and Cons

Let us discuss the pros and cons. For those opting for the lease rental, the primary advantage for the buyer is that a price can be locked in. However, there are several potential drawbacks and numerous concerns that make rent-to-own more complicated. Oftentimes, it is more expensive compared to just renting. Among these types of homes, the tenant’s rent payment is likely higher than the market rent because this is the eventual down payment on the property. This extra amount is forfeited if the tenant decides to not buy.

Options for Tenants

The potential buyer is also responsible for buying the back taxes that the owner has incurred. Prospective home buyers must have their homes inspected just like any homebuyer purchasing a home in the traditional and conventional manner. However, if the renter/buyer can no longer make payments, this results in eviction and foreclosure.

Some apartments offer the option for their tenants to sign a lease with an option to buy by putting a percentage down which is usually around 20%. The first year of rent goes toward lowering the purchase price. Usually this is a win-win situation for tenants. When looking for homes for sale in Worcester, MA, you can ask the seller if this option is available.

For those who cannot afford the 20% down payment, there are alternatives. There are government home loan programs that lend to individuals with bad credit, have little savings, and low income. There are also low down payment options. If a tenant is renting and able to afford higher payments, this is an opportunity to build a better credit rating and simply make a down payment. Renting to own is one of the smartest decisions a tenant can do. Thinking about the long term and deciding rent to own homes in Worcester, MA makes people feel that their homes are worth investing in.