Homes across the country are selling fast but there is a group of potential homeowners who may need information and help as to the process of buying a home. These are the lower income wage-earners who have been renting for a period of time. These wage earners may have damaged credit or may not have been homeowners before and therefore need to consider the pros and cons of rent to own homes as a solution to buying their own home, building or restoration of their credit.

Conventional homebuyers are required to meet certain specifications. For example, they must have a credit score of at least 650, have a number of years of provable income, be able to make a down payment that is usually twenty percent of the price of the home and buy their own homeowner’s insurance. Many would be homeowners today are not able to meet that qualification and so are stuck in renting homes or living with relations instead being able to live in their own home.

One of the advantages of investing in a rent to own home is that the costs may be less at first. The initial amount down will often vary depending on what the owner offers. This may help new potential owners to be able to save up more money over time to get rid of debt or reduce bills. Rent to own homes usually follow laws that vary from state to state, unlike conventional home buying loans that are usually roughly the same throughout the country.

In a rent to own home, the equity will build over time and that will give those in the rent to own home a better credit rating. But remember to make certain of the laws concerning rent to own homes in your particular state because they may be very particular as to the timing of payments and purchase price. Homeowners who are selling rent to own homes are usually able to carry the note of the purchase price but they can take it back if certain conditions are not met by those renting the property.

Property owners who offer rent to own homes usually do so because they have had their home on the market for a number of months due to market values being down or unable to find buyers. A typical rent to own home contract lasts from two to five years, with an option to buy at the end. A portion of the rent paid to the homeowner goes towards the purchase price of the home.

For renters wishing to purchase a home, the rent to own home offers a good chance to find a good neighborhood and to lock in the terms of purchase price and rental agreement for the benefit of the buyer. For the homeowner who owns the rent to own home, it offers a chance to have someone else pay for the mortgage and have a prospective owner who will have credit value and investment in the home to purchase it after the rent or lease time is over.

The contract itself may vary from state to state, most of the rent to own contracts are negotiated separately with the benefits and conditions to the seller and buyer spelled out. The seller is assuming risk if the renter does not buy the property at the end of the lease and the renter will often lose the extra money paid if he or she does not buy the property after the lease is over.

Here is one interesting prospective benefit for those who invest in the rent to own property. If the price agreed upon by both parties is a set amount but the property values increase during the time, the seller will lose out of the increased value he or she could have received for the home had it been listed later. It is generally believed that rent to own homes will usually be a good idea provided both parties have done their homework and are bargaining in good faith. The seller will get longer term renters who will have an investment of money in the property that they can use at the time of closing to cover costs associated with the closing process. For the buyer, it offers a chance to own a home after the relatively short period of time renting for an agreed upon amount for that time. This allow the renter to build up their credit and regain financial health over the agreed time of rental before purchase time arrives.

As far as renters wanting to buy homes, the downside is that they may be trying to find them when the market is good for sellers but not for buyers. If there are a lot of qualified buyers for homes on the market, there will not be as many rent to own homes in areas that are desirable for those who want to rent to own homes. It will be to the low income buyer’s advantage to study the markets and seek advice from professionals who help with these situations for qualified advice to purchase homes using this method. Research how and why rent to own homes will allow the prospective home buyer to make wise decisions and not be influenced by something that sounds like a wonderful dream but turns into a nightmare due to some unforeseen or unknown qualification or regulation in the contract.

Asking questions and investigating how the process works is the best advice for both the homeowner who is selling the home and the buyer who is seeking this method of purchasing. It is always better to ask and find out rather than find out later when it is too late to change your mind and you may be in a worse situation with no way out. Do your best to provide concise information when starting the process. Have in mind what you will and will not stand for in a home, which values are most important and are those that can be negotiated for or temporarily dealt with until a more permanent solution is achieved.

There is help for those low income families to find out the information they need in order to find rent to own homes in their area. Find an honest person and do your research, take time to consider all sides of the question, don’t let your emotions get ahead of you. Time spent in thinking and planning will help you in finding the right rent to own home. Find out if there are additional costs or responsibilities you are liable for while leasing a home to own.

Make sure it is spelled out who is responsible for what costs and repairs. Insurance is important as are utilities. Who pays for them? What about improvements to the home? These are all questions that need answers and best asked before you sign on the dotted line. Caution and research will allow you to navigate through the tricky bits of negotiation of purchasing a rent to own home.