What is rent to own? Like any other home buyer, you will need a mortgage to cater for the purchase of a new house, however, in the case of rent-to-own, it is an agreement that a seller gives his tenant time to build his or her credit until it qualifies for a mortgage in a specified amount of time may one to four years in accordance with their agreement. The tenant pays a fee known as option money to keep the deal open and disallowing other partners from making any other deals with seller. Therefore, it offers an opportunity for those with a low credit score to save up a down payment.



This is the first step and it specifies how and when the purchase price of the home is determined. In most cases, the purchase price is much higher than the market value and a contract is signed to keep the deal alive. In other cases, the determination of the price is based on when the lease expires in respect to the current market value and so most buyers prefer to lock in the price of purchase especially when prices are trending up in markets.


Rent is paid throughout the lease term and it depends whether the payments apply to the eventual price of purchase. Typically, the price of purchasing the house is slightly higher than the rent but know exactly what you are getting for paying the premium. However, in some contracts, the option money can wholly or partially be applied to the eventual price at closing.


In respect to the terms of a contract, it can be the landlord’s responsibility to for maintaining the property or the responsibility solely rests on you the tenant so it is advisable to read the fine print of the contract carefully understanding each bit. In both cases, you will be needed to have a renter’s insurance policy that covers loss of personal property and liability coverage if somebody gets injured while in the home or if you injure someone accidentally. You should also make sure that the property taxes are updated before signing anything.


If the contract ends, it will depend with the kind of contract you signed, if it is a lease-option contract, and you now want to purchase the property, you will need a mortgage to pay the seller in full and become a real homeowner. On the other case, if you cannot secure enough finance by the end of the lease contract or you decide not to buy the house, the option expires and you will move out of the property like any other renting tenant. You may forfeit any funds paid to that moment, including the option money and any other credit earnings on the rent but you will not be in any mandate to buy the home or continue renting.

Benefits of Rent to Own

– Bad Credit Score Renters

This is most advantageous to those renters with a poor credit score, the agreement helps them with sufficient time to improve their credit status allowing them to also be homeowners.

– Testing of Property

This kind of business has helped reduce fraud since the renter stays on the actual property that should be bought hence being reassured, therefore, and assesses the property before making a decision.

– Appreciation of Price

The contract price is fixed and final hence the price of purchase remains the same and in case of any drawbacks in markets, the same also applies to the pricing of the property.

Disadvantages of Rent to Own

– Money forfeiture is possible hence you can lose all the money paid initially.

– Risk of pricing in the case prices go low and the initial contract still stands.

If you are a renter with a poor credit score and wants to be a homeowner, then rent-to-own is the way to go contact Titan Home Buyers and be assured of owning a home.

If you’re ready to talk to someone about Rent To Own, give Titan Home Buyers a call at 843-501-0519 today!