Are you Facing Foreclosure?
If you are facing foreclosure then you must be thinking about a short sale, short sale is the best way to get out from under that upside down mortgage, but the the big question, “what do I do next?”
Well there are many options out there;
- Rent an apartment (there is no investment here)
- Rent a home (why pay some one else’s mortgage?)
- Rent to own (the best option if you want to get back into a house)
The option I want to talk about is by all means Rent to Own.
How Rent-to-own Homes Work
Let’s look at some of the advantages and disadvantages for buyers.
- Buyers have time to build income and repair their credit history as they rent the house.
- Depending on the agreement, renters can walk away if they find something seriously wrong with the house. Although the renter will lose the option fee and all of their rent credit money, that amount will be much less than if the renter had bought the house outright and then tried to leave it later.
- Buyers still have to pay the upfront option fee. It’s usually a percentage of the agreed-upon selling price of the home and is often thousands of dollars. Although this money will go to the down payment should the renter decide to buy the house, it can still be difficult to accumulate that much money before renting.
- If the buyer is just one day late on a month’s rent payment, most agreements void the rent credit for that month. Think about the previous example, where the three-year renter received a $400 rent credit each month. If the renter were late just three times each year, at the end of the lease period the renter would have $3,600 less for the down payment. Rent-to-own leasers must pay on time, every time.
- All of those repairs that used to be somebody else’s problem in a rented apartment often become the responsibility of the new buyer, even during the rental period. Whether it means climbing on a ladder to unclog the gutters or having to pay for a new washing machine when the original washer breaks, the renter has to take care of it.
Having said all of that, this is the one option that will create a plan for you to get back into your very own home again.
For questions in regards to foreclosures and short sales please call us at 1 916.442.6400 there will be a human at the other end of the line waiting to assist you or simply fill in the form on the contact us tab.