Home rent to own? Advice Please
 

Looking to move after the first of the year closer to my work in Northen Va. My GF and I are both former home owners but are now renting.

We were / are waiting for the overheated market to cool .....which it is. We have seen several homes that are "rent to own" No specifics on the deals just intrigued that these are now appearing in this area.

Any Mortgage guys out there familiar with these and what would be favorable terms / conditions for us?

I suspect it is just another way to unload a overpriced home in this market, but sound advice is needed here.

Thanks all! ;)

Rent to own is a good deal for the landlord. Despite being a landlord, I would advise you to simply hold your money. In a potentially declining housing market, a rent to own is not the thing to do, because you would lock in the sale price at the high current price or appraised value (which is subject to arm twisting) down the road. Why not wait until the prices come down across the board, giving you the pick of the litter? The other downside is option money and increased rents. With lease/options and rent-to-own, you pay a nonrefundable option fee to own the right to buy the house. If you don't buy the house, you lose the option fee. In addition, many landlords/investors jack up the rent price for rent to own.

Like I said, rent-to-own&lease/options are a great deal for the owner.

3-4 years ago, lease/options were fairly common, but as lending standards fell, virtually anyone with a 525+ credit score could get a loan. What you may be seeing now is an attempt to move properties as the market tightens.

If your area is like I think, you can rent a house for far less than buying. Rent a house you like, and when prices come back in line, buy. In the meantime, you're pocketing the savings.
good luck, jurgen

Every rent to own deal I've ever heard of was onerous on the renter - like Jurgen says.

They're generally targeted at people who the bank won't lend to and have implicit or explicit interest rates to account for the risk.

The advantage of it (from a purchaser's perspective) might be that you don't have to deal with the hassle of a mortgage, dealing with bankers, etc.

What Wayne sez...

You can rent a house or rent the money to buy a house.

. . .it's all about the deal you choose to lock-in.

If the owner is financing the house and the intrest rate is of the going type you can be ok. I bought a few houses with owner financing and made them rentals. Sold the last one a few months back, Made a healthy sum. Just make sure to cover your butt Have inspections and apraisals and surveys done!
If you live in Warrenton and want to be closer to No.Va just stay put......It's heading south as we speak.