We receive dozens of inquiries every month from buyers looking for a rent to own home in Denver. When we are contacted by one of these clients, our first question is “Why do you need a Rent-To Own Home?”
There are legitimate reasons for buying a home using a Rent-To-Own option, and we want to educate you on when to use these programs, and when another alternative may be a better option for you.
While a Rent-To-Own home can be a good solution in many situations, here are the circumstances where they work the best:
- Recent Bankruptcy / Foreclosure: If you have had good credit in the past, but recent events have caused traditional lenders to reject you, a Rent-To-Own option may be the ideal solution to help you get into the home you want now whiel rebuilding your credit so you can qualify for a mortgage in the near future.
- Verifiable Income: Are you self employed or recently changed careers? If mortgage lenders can’t count your income for the next 12-24 months, but you need to get into a home now, a Rent to own may be a great option to consider.
- Other Credit Issues: If you have had some credit issues in the past, but are in the process of credit repair, a Rent To Own program can help you get into the home no while you finish repairing your credit.
Again, while these lease option type programs work for many people, they do not fit everyone’s needs. Here are a couple of situations where they are typically not ideal:
- Lack of Down Payment Funds: If the reason you are looking at a rent to own option is lack of immediate funds, you should look at other options. Most rent to own programs require 8%-10% of the purchase price as a down payment due when the lease option contract is executed. Many of these programs allow this money to be returned to you when you buy the property (to be used as your down payment), but it is required as cash up front. If a lack of down payment is the only reason you are considering a Rent-To-Own option, consider one of the many Down Payment Assistance programs in Colorado. Our team can help you with any of these great programs.
- You “Might Want To Buy in the Future”: If you are looking for a place to rent, but simply like the idea of being able to buy if you want to down the road, these are probably not the programs for you. Because of the risk and structure of these programs, rents are typically higher than if you were to simply rent a home. While many times this increase in rent is repaid to you when you do ultimately purchase the home, it is not an extra expense many typical renters need to pay.
For many people, these programs are ideal and allow them the opportunity to get into a home now that they want to buy but are unable to purchase immediately. If you would like more information, you can call our team at 303-726-1874 or view this step-by-step guide to Denver Rent to Own programs.
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