How Does Rent to Own Work

Considering a rent-to-own home? This unique buying option can be really beneficial for those looking to eventually own their home.

Rent-to-own, also known as a lease purchase, is a legal agreement where you agree to rent a home for a specific period, typically one to three years, with the intention of buying it later.

This arrangement is particularly useful if you need time to save for a down payment or improve your credit score. Rent Credits are essentially extra money that you pay along with your rent, which goes toward your future down payment. For example, if your rent credit is five hundred dollars monthly, in one year, you’ll accumulate six thousand dollars toward buying the home. An Option Fee is an upfront, non-refundable deposit, typically ranging from one percent to seven percent of the home’s purchase price. This fee secures your right to purchase the home later. While it is non-refundable, it counts toward the down payment if you decide to proceed with the purchase. Rent-to-own offers a structured path to homeownership by allowing you to lock in a purchase price, save incrementally for a down payment through rent credits, and stabilize your housing situation while you prepare financially to buy. It’s an appealing option for those who want to build equity in a home before officially taking on a mortgage. Rent-to-own offers a practical, disciplined savings strategy and the joy of living in your future home while you prepare to make it officially yours.