Pros and Cons of Rent to Own Housing in Houston: EZ House Buyers

Traditional methods of purchasing a home are becoming less common than decades past.  The American Dream has changed a bit.

As banks become tighter with their loan approval process and Americans are still digging out of the recession (and possibly credit problems they may have fell into), many are turning to alternative means of purchasing a home.

Renting apartments and houses has increased dramatically in recent years… and renting-to-own a house (or Lease Option as many people call it) has become a popular way for families to buy a local Houston, Texas TX house directly from a seller (after a rental period that usually lasts 12-24 months), without the stringent qualification process offered by banks.

There are many pros and cons of rent to own housing in Houston, Texas TX, which we at Don McClain EZ House Buyers will outline in this article.

Remember to read each detail of any contract that you sign, and consult with a financial adviser or rent-to-own expert if you have any questions, or any part of the process is confusing to you.

Pros of Rent to Own Housing in Houston, Texas TX– Why It Can Be Great

Easier Qualification

The largest hurdle to home ownership is usually qualifying for a loan for the house.

Lenders have become more and more stringent with income and asset requirements to approve a loan since the recession, and with the current state of the economy, many Americans just cannot meet these unrealistic expectations. In a rent-to-own situation, the seller can determine the guidelines of approving the contract, and is often much more reasonable than traditional banks.

And this means that usually there’s a much lower upfront payment to get into the house… and you don’t have to go through the rigors of a bank qualifying.

Time to Improve Your Credit

As you’re renting to own a home, you have an opportunity (usually 1-5 years) to rebuild your credit rating so you can get a home loan to buy that house at the end of the rent to own / lease option agreement.

Don McClain says that while working on your credit, you’ll have the opportunity to live in your future home, and when the term has ended, you’ll have saved both a down payment and hopefully increased your credit rating to get a traditional mortgage from a bank.

Cons of Rent to Own Housing – Some Drawbacks

Rent can be More Costly

In a rent-to-own situation, including here in Houston, Texas and all around TX, the seller can charge more for monthly rental since it comes with the option to purchase the house. If a buyer is unable to purchase the home at the end of the term, they will have spent more to live in a home without the benefit of purchasing it.

So you need to be sure that you’re serious about potentially purchasing this house at the end of the rent to own agreement… otherwise you’d be better off just renting a house through the normal rental channels.

Lease Cancellation

Don McClain real estate suggests that buyers must beware the risks involved with lease cancellation, eviction, and other factors when considering a rent-to-own home. If a buyer is late on payments or breaks the lease in any way, the option to purchase the home may be lost, and they will have forfeited all fees and additional rent they’ve paid for the ability to purchase at the end of the term.