What is a Rent with an Option to Buy? (Rent to Own)

What is a rent with an option to buy? With this type of program you are literally RENTING WITH AN OPTION TO BUY.

DOWN PAYMENT/OPTION PAYMENT:

This means that you often have to put down an OPTION PAYMENT or sometimes referred to as a DOWN PAYMENT.

DURATION OF CONTRACT:

With this type of agreement there is a portion of your rent that will be applied as credit toward your purchase for a period of 3 years. After 3 years you would be responsible for either getting financing from a bank or private lender or paying cash for the remaining balance of the property.

MONTHLY CREDIT:

Often times the amount credited monthly is equivalent to the principle portion of a mortgage payment.

For example if you pay $900 per month for 3yrs based on a mortgage for $50,000 at 10% interest your approximate credit per month would be $125.

$125 per month for 3yrs equals $4,500

HOW MUCH CREDIT AT 3 YRS:

If you put down a $4,000 for the required option deposit then you would have:

$4,000 Down Payment

+$4,500 Credits for 3yrs

$8,500 Total toward purchase

$50,000 Sale Price

-$8,500 Credits + Down Payment

$41,500 would be the amount to finance after the 3 year period

This kind of program helps first time home buyers build equity to allow them to purchase a home instead of just paying rent. If you have any questions about this type of program please contact us at ReviveMountCarmel.com.

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House for RENT to OWN in Mount Carmel PA