Lease To Own Homes | What Are The Risks?

Lease To Own Homes | What Are The Risks?

Lease to own homes are an increasingly popular option for people looking to purchase a home. With a lease to own option, buyers are able to “rent” a home for a set period of time, usually 2-3 years, with an option to purchase the home at the end of the period. This allows buyers to begin building equity in the home, improve their credit score, and get a foot in the door of homeownership without having to qualify for a traditional mortgage. Additionally, lease to own homes are often more affordable than traditional mortgages, as they require no down payments and have lower monthly payments.

What Are The Risks of Lease To Own Homes

• Defaulting on rent payments can lead to the renter being evicted and losing any payments already made.
• Maintenance on the home is the responsibility of the renter, and any repairs needed may be expensive.
• The owner of the home may raise the rent or increase the purchase price throughout the term of the lease, thus making it more difficult to purchase the home.

What Are The Benefits of Lease To Own Homes

• Flexible payment options: Lease to own homes provide flexibility to buyers, allowing them to gradually build equity in the home without having to commit to a large down payment.
• Credit score protection: Lease to own homes can be a great way to improve credit scores since payments are reported to credit bureaus.
• Lower upfront costs: With lease to own homes, buyers can often get into a home for less money up front than a traditional home purchase.