Owning a home — it’s part of the American Dream!
Home ownership gives a sense of freedom, security, and permanence.
Americans dream of growing up, finding a home, and starting a family; they dream of owning their own piece of land and proudly knowing “it’s mine.” Millions of families want a nice home, a white picket fence, a place to rest after a hard day of work, and a place to raise their families.
It’s no wonder that pioneers and settlers came to America to escape the over-crowded rental slums of the Old World and to tame and claim their piece of this vast land. Even today, newcomers to America are attracted here in part because of the opportunities for a better future — which includes owning their own home.
The American Dream Is Changing…
While home ownership continues to be a high priority among many Americans, the American Dream is evolving. There’s still plenty of land and places to live, but it’s evolving for other reasons:
- The number of Americans facing credit issues is increasing steadily, potentially due to accumulated debts, unfavorable decisions, challenging situations, or insufficient income from low-wage occupations.
- Additionally, there is a rising number of loan applications denied by banks due to the institution’s stringent loan prerequisites.
- Furthermore, the workforce is experiencing a trend toward more lower-paying jobs, while better-paying positions are either disappearing or relocating overseas.
- The economy remains unstable, with one recent recession concluded and another looming on the horizon.
Although these might not be ideal circumstances, this is the reality we live with. As a result, two things are happening:
- House buyers are trying to find creative ways to acquire a home to live in, even if their credit isn’t at the level that a bank is looking for.
- House sellers are trying to find creative ways to sell their house because there aren’t as many buyers.
The emergence of innovative approaches has opened up a fresh avenue for individuals to purchase houses, notwithstanding their ineligibility for conventional loan applications. This is how the American Dream is transforming – individuals’ aspiration to own homes persists, and it can now be fulfilled through novel purchasing methods….
Rent to Own Housing in Florida and Other Areas
In a traditional house purchase: The purchaser visits a financial institution, tenders an initial payment, and secures a mortgage loan for the outstanding balance on the property being acquired.
In a rent to own agreement: The prospective tenant, who may not possess impeccable credit, collaborates directly with the homeowner to secure a lease agreement for a specific duration, allowing them to enhance their creditworthiness and become eligible for a mortgage loan in due course.
This works well for everyone!
- From the seller’s perspective, this approach provides access to a larger pool of prospective buyers.
- However, its significance lies in the benefits it offers to the buyers. It presents a novel method of obtaining a permanent residence in a home that they are likely to purchase, instilling a sense of ownership even before ownership is established.
- Additionally, it affords them an opportunity to improve their credit score. The banking industry is equally enamored by this concept as it enables more people to become eligible for loans.
Just imagine: If you’re an aspiring homeowner facing difficulty in securing a conventional bank mortgage presently, you may have believed that owning a permanent residence was still years away. However, you need not wait any longer. By obtaining a non-traditional mortgage, you can achieve the dream of homeownership now and relish the feeling of ownership immediately. Additionally, you’ll also acquire a fixed address, which could enhance your credit score.
What are the Costs of Rent to Own Housing in Florida?
A rent to own arrangement entails a buyer taking up residence in a property, remitting rent payments, and accruing credit towards a down payment for the eventual acquisition of the property. For families who may not possess the requisite credit score to secure a conventional mortgage, this alternative presents a valuable opportunity.
Although the pricing is significantly influenced by various factors, the specifics outlined in the agreement would regulate each rent to own contract. Nonetheless, the broad picture would generally mirror this….
First, you’ll pay a regular rental amount (just as you would if you were renting anywhere). This amount goes towards the rent and upkeep of the property, just like a regular rental.
Second, the costs of rent to own housing in Florida may be higher in some areas… but for a very good reason. In certain instances, the rental amounts for rent-to-own properties may exhibit a slight elevation in comparison to rental rates obtainable elsewhere. This phenomenon is attributed to various factors, including the location of the house within the neighborhood, the condition of the property, and the duration of the rental period prior to the eventual purchase.
In addition, the agreement includes a lease option, which grants you the opportunity to purchase the property upon the conclusion of the rental period. This provision is incorporated into the rental fee, and in certain instances, a fraction of your monthly rental payments may be allocated towards a down payment for the property. It is recommended to confirm with the landlord whether this arrangement applies to your specific lease.
Example: Despite the availability of neighboring houses renting for $900, you opt to lease a residence at the rate of $1,000. However, the additional $100 is directed towards your initial payment and progressively accrues on a monthly basis for a duration of three years until such time that you are ready to acquire the property.
Important: The expenses associated with rent-to-own properties in Florida can differ from one seller to another. Thus, it is essential to engage in a dialogue with the seller regarding the cost implications when contemplating a purchase.
Although it may be the case that renting-to-own a home could result in slightly higher monthly payments in certain situations, the potential savings in the long run could be substantial. This is due to the fact that numerous sellers establish a predetermined price for the property, which offers safeguarding against fluctuations in the housing market.
Example: Assuming that you have consented to a rent-to-own agreement for a duration of three years, with an option to purchase afterwards, you and the seller have reached a consensus on a price of $200,000 upon the agreement’s conclusion. Subsequently, in a scenario where the real estate market becomes exceptionally competitive, and neighboring homes are selling at a rate of $300,000 by the end of your rental period, you would be able to save $100,000 on your future home’s cost, merely by opting for a rent-to-own arrangement and securing a price in advance.
Rent to own — it’s a great new way that families are getting their own piece of the American Dream even when circumstances have prevented them from doing so in the past.