is rent to own like a mortgage ?

I have bad credit and 0 down so I can not get a regular mortgage but there was an ad on facebook for rent to own. What is the difference between rent to own and a mortgage? 

Update:

if I don't own the house does that mean I do not pay property tax

24 Answers

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  • 1 month ago

    The huge thing is in the event that you miss an installment or if your installment is deferred by the mail center you are starting over. Lease to possess additionally makes them pay multiple times what you would pay from a home loan, it's not in support of yourself.

  • 1 month ago

    Lease to-claim contracts are an option in contrast to conventional home advances. ... In any case, the agreement likewise gives the leaseholder selective rights to buy the home at a predefined point later on. A bit of the cash paid forthright and as a feature of the set up month to month lease likewise goes toward the price tag.

  • Anonymous
    1 month ago

    Do you decide to stay at your place for decades? If you buy an asset on a loan, you might have to pay the asset's tax annually except for your mortgage (principal and interest). Do you have another human being to afford the heavy budget together? That will lead to a dumb problem: if you will break up the other day, how to handle the messes. If a child is born, another issue is raised. It sounds complicated and unreal.

    Since your financial condition seems stern, you'd better banish this Idea from your mind. The idea of "Rent to own " means more expensive. At first, finding someone to share the budget.

  • 1 month ago

    When you rent to own, you are a tenant and are renting the home. However, a certain portion of the rent will be applied to be used as your downpayment should you decide to buy the home. This is a procedure that has been around for years although it is not commonly used.

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  • garry
    Lv 6
    1 month ago

    there is no such thing as rent to own , , hates it when they use deceiving advertising . theres no such thing as rent to own , its a mortgage

  • 1 month ago

    The big thing is if you miss a payment or if your payment is delayed by the post office you are back to square one.  Rent to own also has you paying 3 times what you would pay from a mortgage,  it's not in your favor. 

  • 1 month ago

    Rent to own is one of the riskiest ways to try to own a home. The homeowner holds all the cards in this deal. You are basically just renting, subject to the whims of the homeowner--who is supposed to be marking part or all of your monthly payments toward the purchase price to own the house--but if you're late one month, the entire deal can be voided. 

    I suppose there are some owners who are honest about it--but not in MY experience. They TELL you you're paying to eventually own the property, but they can rescind the offer at any time, and a lot of them do. 

    They are also known as "Land Contract" purchases. This is the definition of land contract:  "A land contract is a written legal contract, or agreement, used to purchase real estate, such as vacant land, a house, an apartment building, a commercial building or other real property. A land contract is similar to a mortgage, but rather than borrowing money from a lender or bank to buy real estate, the buyer makes payments to the real estate owner, or seller, until the purchase price is paid in full."

    Note that the price must be paid in FULL for the contract to be fulfilled. That means you'll be renting for a LOOOOOONG time--and anything can happen between the initial payment and the final payment. And anything the owner wants to impose on the renter is pretty much his business. You have very little legal protection with these sorts of buying agreements. 

    A mortgage is a loan you obtain yourself for the purchase of property. YOU qualify, and the money is given to YOU to give to the seller, and you pay it off by making payments to the mortgage holder--the bank, or other lender. 

    If it is not possible to obtain a mortgage for any reason on your own, then you should not try buying a property. Whether you rent OR pay a mortgage, you're going to have to pay for your housing.  The only difference is who is responsible for the condition of the property; mortgage=you,  rent=landlord. 

  • 1 month ago

    No.

    Rent to own is a agreement to rent and pay extra each month and that extra goes towards your down payment.

    You still have to qualify for a mortgage to buy the place after a certain amount of time; typically two or three years.

    Needless to say, it rarely works out well.

  • Anonymous
    1 month ago

    Don't enter any rent to own without consulting a legal expert.

  • 1 month ago

    Don't do a rent to own!  With a mortgage you get title (ownership) but with rent to own the seller retains title until paid in full.  A lot could go wrong.  What if the seller doesn't pay his mortgage or taxes?  You could loose the property through no fault of your own.  Consider a lease with the option to purchase.

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