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How To Stop Paying Rent and Own Your Own Home

Dont Pay Another Cent in Rent to Your Landlord...


Its a dream we all have to own our own home and stop paying rent. But i youre li!e most renters" you eel trapped within the walls o a house or apartment that doesnt eel li!e yours. How #ould it when youre not even permitted to $ang in a nail or two without a hassle. You eel li!e youre stu#! in the renters rut with no way o rising up out o it and owning your own home.

Dont Feel Trapped Anymore

It doesnt matter how long youve $een renting" or how insurmounta$le your inan#ial situation may seem. The truth is" there are some little !nown a#ts that #an help you get over the hump" and trans er your status rom renter to homeowner. %ith this in ormation" you will $egin to see how you really #an&

Save for a down payment Stop lining your landlord po!"et # and Stop wa ting thou and of dollar on rent.

If youre like most renters, you feel trapped within the walls of a house or apartment that doesnt feel like yours.

Step $y Step %uide


Step &'De!ide what "ind of home you need and !an afford (arrow your home ear!h Be ore you start loo!ing or a rent to own or owner inan#ed home" you should de#ide what !ind o home you want and the $est lo#ation. %hat is the $est #ity or part o town or you $ased on your 'o$" amily" riends" #hur#h and li estyle( How many $edrooms and $athrooms do you need( %ill your amily grow or de#rease in si)e in the near uture( *o you need a garage or $asement or storage( )a*imum monthly payment + ter you have a good idea o the type o home and lo#ation " de#ide how mu#h home you #an a ord. The $iggest mista!e $y ar that people ma!e is thin!ing they #an a ord a home that they really #an,t. Ta!e the time to #are ully #onsider your monthly $udget ta!ing into a##ount your a#tual in#ome and a#tual e-penses. + general guideline is to ta!e your monthly in#ome and divide it $y ../. This will give you a ma-imum monthly house payment or rent amount. 0or e-ample" i your monthly in#ome is 1."222 then your payment or rent shouldn,t $e greater than 13/4 per month 5."222 6 ../7. + ter you have this payment amount" su$tra#t it and your other total living e-penses rom your monthly in#ome. + ter you do this you should have" at the very minimum" a #ouple hundred dollars. This le t over amount is what should $e saved or une-pe#ted e-penses" retirement or other ma'or pur#hases. +ow mu!h for a down payment Besides determining your ma-imum monthly payment" you should de#ide how mu#h you #an a ord or a down payment. Be sure you don,t use all your savings and ta!e into a##ount moving e-penses" loss o pay rom a 'o$ trans er" swit#hing utilities and other une-pe#ted e-penses. 8sually" or an owner inan#ed or rent

to own pur#hase" 9: to /: will $e needed or a down payment. Step ,' Learn a-out rent to own and owner finan!ing This will $e one o the most important steps to ma!e sure you ma!e a sa e de#ision to rent to own or owner inan#e a home. ;any horror stories happen $e#ause o unin ormed or unedu#ated de#isions. There are a #ouple di erent types o rent to own or owner inan#ing options. Rent to own $asi#s Renting to own a home is the most #ommonly heard o type and #an also $e #alled lease option" lease to own or lease pur#hase. In a rent to own pur#hase" the $uyer signs a lease or rental agreement and an option agreement. The option agreement is what allow the $uyer to pur#hase the home. In the option agreement" a pur#hase pri#e and deadline to pur#hase the home $y is agreed upon. The option ee" whi#h is a non<re unda$le ee" is also set and is normally 9 to /: o the pur#hase pri#e. The rent and rent #redit is the last important part o renting to own. Rent #redit is the portion o the rent that gets put towards the pur#hase pri#e. The rent and rent #redit is also non<re unda$le. =earn more a$out how rent to own wor!s. Owner inan#ing $asi#s Owner inan#ing is the se#ond most popular option and usually the $est option or $uyers. Owner inan#ing is normally done with a #ontra#t or deed or land #ontra#t. Owner inan#ing is more li!e a traditional mortgage $e#ause there is a pur#hase pri#e" interest rate" down payment and loan length. It is di erent rom a traditional mortgage $e#ause the deed or title to the home is not trans erred to the $uyer until they ma!e all the payments" pay it o or get their own mortgage. The $iggest advantage o owner inan#ing over a rent to own pur#hase is that there is normally not a time limit or getting your own mortgage li!e with a rent to own pur#hase. Step .' Find a home 0inding the right rent to own or owner inan#ed home #an ta!e time and wor!. The !ey is not to get dis#ouraged. Besides loo!ing or rent to own homes or owner inan#ed homes on Bu$$a0inder.#om" the $est pla#es to ind a home are the #lassi ied se#tion o the lo#al newspaper" Internet Home =isting Sites" or sale $y owner signs and homes or rent. >ven i a home or sale $y owner or or rent is not advertised as a rent to own or owner inan#ed option" many times" the owner will #onsider it.

0inding a home #an $e easier $y ollowing step 9 and narrowing your sear#h. *uring this sear#h pro#ess" #he#! the #ondition o the home and ma!e sure there is no o$vious damage and everything is in good wor!ing #ondition. + home inspe#tion #an always $e done i you are unsure. Step /' Apply and negotiate pur!ha e + ter you ind a home that you li!e and the owner is willing to owner inan#ing or rent to own it to you" most owners will re?uire you to su$mit a $asi# appli#ation to them. In ormation that is usually as!ed or in#ludes #onta#t in o" employment in o and landlord re eren#es. %hen illing out the appli#ation $e sure to in#lude as mu#h a##urate in ormation as possi$le. I you s#hedule an appointment to see the home or meet the owner ma!e sure you are on time to show your dependa$ility. ;any people that apply or owner inan#ed and rent to own homes do so $e#ause o less than per e#t #redit. ;ost owners don,t rely too heavily on #redit or #redit s#ores. The most important thing is a relia$le in#ome that is at least ../ times the monthly payment li!e des#ri$ed a$ove and re eren#es. +ny other in ormation that #an show your relia$ility" a$ility to pay and

ta!e #are o the property should $e given to the owner to improve #han#es o $eing approved. Owner might $e unwilling to negotiate on the pri#e" payment" down payment very mu#h $e#ause they are o ering an easy way to wor! towards owning a home and the ease o $eing approved" even with $ad #redit. >ven so" it is always a good idea to as!. Step 0' 1mprove !redit and get approved for a mortgage Tal! to a mortgage $ro!er or lender and see how #lose you are to ?uali ying or a traditional mortgage. Here are a #ouple ?uestions to as!. How long do you thin! it will $e $e ore I #ould ?uali y( %hat pur#hase pri#e do you thin! I #ould ?uali y or( %hat would I need or a down payment and #losing ees( %hat should I do to improve my #redit( Ta!e what in ormation the lender #an give you and start to $uild your #redit. Besides ma!ing sure you pay all your $ills on time" here are a ew tips to start to improve your #redit. @onta#t your #reditors as soon as you !now you will have a pro$lem paying $ills on time. Try to wor! out a payment arrangement and negotiate with them to !eep at least a portion o the late notations o o your #redit reports. I your situation is serious" see a legitimate" non pro it t #redit #ounselor. #ounselor +void the s#am artists who promise a ?ui#! reversal o your #redit pro$lems.

+ow Doe Rent To 2wn 3or"4


Rent to own is also known by several terms such as lease option, lease to own or lease purchase and are all used to describe the same basic rent to own concept. Rent to own -a i! overview In a rent to own pur#hase" the $uyer signs a lease and an option agreement. This allows the $uyer to rent the home as well as give them the option to pur#hase the home at a set pri#e during a #ertain time period. There are / important parts in a rent to own transa#tion. They in#lude the rent" rent #redit" pur#hase pri#e" option length" and option ee. Rent !redit The rent #redit is the amount o rent that gets put towards the down payment. It #an either $e a set portion o the mar!et rent or an amount a$ove the mar!et rent. 0or e-ample" i the mar!et rent is 19"222 per month" the seller might #redit 1.22 o that towards the down payment. Or" they might as! 19"222 per month rent and a 1A22 rent #redit or a total o 19"A22. ;a!e sure to pay on time. I it is late" the seller might have the option o not giving you the rent #redit or that month. Be sure that all details o the rent #redit are in#luded in the option agreement. Pur!ha e pri!e The pur#hase pri#e is one o the most important parts o the rent to own agreement. This is the amount the $uyer will pur#hase the home or. Be ore signing any type o #ontra#t" do a little resear#h and ma!e sure the pri#e you agree on is a air pri#e. >ven i the real estate mar!et goes up or down" the pur#hase pri#e will not #hange. 2ption fee The option ee is is a one time ee paid at the start o a rent to own pur#hase. I the $uyer pur#hases the home within the agreed upon time period" 922: o the option ee will go towards the pur#hase pri#e or down payment. I the $uyer does not pur#hase the home it is non<re unda$le and $e#omes rent or the seller. The option ee is normally 9<92: o the pur#hase pri#e. 2ption length The option length in a rent to own agreement is the amount o time the $uyer has to get their own mortgage and pur#hase the home. This time period normally ranges rom .< / years and #an sometimes $e e-tended is the seller and $uyer agree. I the

option period e-pires the $uyer will lose all rent #redits and the option ee. Step 9. Reali)e that a home made availa$le via a standard lease may in#lude an option to pur#hase that home at a spe#i ied pri#e over a spe#i ied time period 5usually one or two years7. In order to a#?uire that option" the renter6$uyer must pay a one time" non<re unda$le" ee #alled the Boption #onsiderationB. The e-a#t amount is negotia$le" $ut it is usually ranges rom A./ to 4: o the pur#hase pri#e. A. Cegotiate a air #ontra#t that will #redit the $uyer 922: o that option #onsideration upon #losing o the sale. .. =oo! or a negotiated per#entage o all rent payments $eing applied toward the pur#hase pri#e o the home. Typi!al term and !ondition 9. Consider what you might e pect to find in a contract as follows! In order to re#eive a rent #redit o /2:" time is o the essen#e. You must pay your rent on or $e ore the due date o your lease 5typi#ally the 9st o the month7. This means it must $e re#eived $y the lessor 5landlord7 on or $e ore the due date. +ny payment re#eived a ter the due date will result in a 2: rent #redit or that month" a late ee may apply and you will not $e $uilding any e?uity. ;aintenan#e is the responsi$ility o the tenant $uyer. You are now renting to own" and home ownership re?uires maintenan#e. This in#ludes things li!e $ro!en windows rom stones or $ase$alls" #logged drains" peeling paint" $ro!en applian#es" $urnt out $ul$s" lawn wor!6snow removal" et#. I any ma'or repairs are re?uired to ensure ha$ita$ility" the owner remains responsi$le. You need to have Boption #onsiderationB. Option #onsideration is typi#ally A./: to 4: o the pur#hase pri#e o the home. It is a non<re unda$le payment" o whi#h 922: is #redited toward the pur#hase pri#e" whi#h $inds the lease pur#hase #ontra#t. A. "earn how this works by studying this e ample transaction!
Imagine a ni#e . $edroom" 9 $ath single amily home lo#ated in a near west su$ur$ o @hi#ago" in a great neigh$orhood with good s#hools and a strong #ommunity. It has $een reshly painted" #leaned" and is ready to move in. The pur#hase pri#e will $e 1A9/"222. ;onthly rent payments will $e 19"/22 and you will re#eive a /2: rent #redit 514/2 per month7. You

need $etween A./: and 4: in up ront option #onsideration. =et,s say your $udget allows or 1D"222 or option #onsideration. This e?uates to appro-imately A.3: 51D"2226A9/"2227. You will also need 19"/22 or the irst months rent or a total initial payment o 14"/22. EPlease note& Option #onsideration is not a se#urity deposit. It is a non re unda$le payment toward the pur#hase pri#e and is 922: #redited toward redu#ing the pri#e o the home.E Suppose you paid all your monthly rent payments on or $e ore the due date and you #hoose to $uy the rent<to<own home at the end o the 9A month lease pur#hase #ontra#t. You will have 19/"222 in e?uity $e ore you even own the homeF Here,s the math& =ease Pur#hase Pri#e < 1A9/"222 =ess& Option @onsideration paid at lease signing < 1D"222 =ess& /2: rent #redit o 14/26m E 9A months < 1G"222 Cet Pur#hase Pri#e a ter #redits < 1A22"222 You started with 1D"222 and $y paying your rent on time" your e?uity position grew 9/2: 5another 1G"2227 or a total o 19/"222 with 9A months. Cot a $ad dealF ;any people ind it nearly impossi$le to save 1G"222 in a year with all the #osts o living #onstantly on the rise. .. #ssure that this is a sound approach by getting it in contract form. Cow you may $e thin!ing" BOH" what,s the #at#h( This sounds too good to $e true.B +nswer" there is no #at#h. There are many possi$le reasons a landlord6seller may want to enter into a rent<to<own agreement. Some reasons may in#lude& Ceeds to maintain ownership or at least one year or tapurposes" 8na$le to get a air pri#e due to lo#al #onditions Tired o per orming minor maintenan#e. %hen one sells a home through a realty servi#e" a #ommission o /<4: is typi#ally paid. In the e-ample a$ove" this #an #ost more than the rent #redit. Sin#e realtors are usually not involved with this type o transa#tion" there is no #ommissions and the landlord #an a ord to pass along the savings to tenant6$uyer in the orm o rent #redits %hen the tenant $e#omes the tenant $uyer 5via rent<to<own7" there is an immediate sense o pride in ownership. Tenant $uyers add value to the #ommunity. They ta!e #are o their uture property" ma!e improvements" and eel good !nowing their rent money is wor!ing or them 5redu#ing the pur#hase pri#e7 rather than 'ust ma!ing their landlord ri#h. $. Consider the many advantages for the renter. Some in#lude&
Building e?uity toward home ownership Co $an! or inan#e #ompany involvement Poor #redit history may not $e an issue.

5 Little 6nown Fa!t That Can +elp You $uy Your Fir t +ome
The pro$lem that most renters a#e isnt your a$ility to meet a monthly payment. Ioodness !nows that you must meet this monthly o$ligation every .2 days already. The pro$lem is a##umulating enough #apital to ma!e a down payment on something more permanent. %ut saving for this sum doesnt have to be as difficult as you might think. Consider the following & important points! 9. You #an $uy a home with mu#h less down than you thin!. There are some lo#al or ederal government programs 5su#h as 9 st time $uyer programs7 to help people get into the housing mar!et. You #an ?uali y as a irst time $uyer even i your spouse has owned a home $e ore as long as your name was not registered. >nsure your real estate agent is in ormed and !nowledgea$le in this important area and #an o er programs to help you with your options. A. You may $e a$le to get your lender to help you with your down payment and #losing #osts. >ven i you do not have enough #ash or a down payment" i you are de$t ree" and own an asset ree and #lear 5su#h as a #ar or e-ample7" your lending institution may $e a$le to lend you the down payment or our home $y se#uring it against this asset. .. You may $e a$le to ind a seller to help you $uy and inan#e your home. Some sellers may $e willing to hold a se#ond mortgage or you as a Jseller ta!e<$a#!.K In this #ase" the seller $e#omes you lending institution. Instead o paying this seller a lump<sum ull amount or his or her home" you would pay monthly mortgage installments. L. You may $e a$le to #reate a #ash down payment without a#tually going into de$t.
By $orrowing money or #ertain investments to a spe#i ied level" you may $e a$le to generate a signi i#ant ta- re und or yoursel that you #an use as a down payment. %hile the money $orrowed or these investments is te#hni#ally a loan" the monthly amount paid #an $e small" and the money invested in $oth home and investment will $e yours in the end.

/.You #an $uy a home even i you have pro$lems with your #redit rating. I you #an #ome up with more than the minimum down payment" or #an se#ure the loan with other e?uity" many lending institutions will #onsider you or a mortgage. +lternatively" a seller ta!e<$a#! mortgage #ould also help you in this situation. D.You #an" and should" get per<approved or a home loan $e ore you go loo!ing or a home. Pr<approval is easy" and #an give you #omplete pea#e o mind when shopping or your home. ;ortgage e-perts #an o$tain written per <approval or you at no #ost and no o$ligation" and it #an all $e done ?uite easily over the phone. ;ore than 'ust a ver$al approval rom your lending institution" a written per<approval is a good as money in the $an!. It entails a #ompleted #redit appli#ation" and a #erti i#ate whi#h guarantees you a mortgage to the spe#i ied level when you ind the home youre loo!ing or.

7Con ider dealing only with a profe ional who pe!iali8e in mortgage or Rent to 2wn Propertie . 9nli ting their ervi!e !an ma"e the differen!e -etween o-taining a mortgage# and -eing tu!" in the renter rut forever. Typi!ally there i no !o t or o-ligation to There are many important i ue you hould -e aware of that affe!t you a a renter. 3hy on earth would you !ontinue to There are many important i ue you hould -e aware of that affe!t you a a renter. 3hy on earth would you !ontinue to en:uirer. Don;t lo e thou and -y throwing it away on rent when with your agent you !ould ta"e a few minute to di !u your pe!ifi! need o that you !an top renting and tart owning. Thi !onver ation !o t you nothing. And# of !our e# you houldnt have to feel o-ligated to -uy a home at the time you review thi . $ut -y ta"ing the time to e*plore your option # and learn a-out the way you !an afford to -uy a home# thin" how prepared and rela*ed youll -e when you are ready to ma"e thi important tep. 7