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Rent to own a house - does the rent go towards my banks downpayment or only towards the purchase price?
I want to rent to own a house which would costs $215,000. Now, after a year, when the full amount of rent ($ 1000) is added to the purchase price, there will be $203,000 left to pay. Is it common to ask the seller that the rent will be considered as a bank's down payment?
I don't care that much if its $215,000 or $203,000. My problem is more to get some amount of money for the down pament!
Thanks...
Y'all give good answers, but I consider
(St)Pete best for his intellectual masterpiece. I now have been enlightened by his 'yes', whatever that stands for.lol -what a night, isn't it?
7 Answers
- Anonymous1 decade agoFavorite Answer
If you have a land contract, the lender will consider your loan a refinance and use the current appraised value of the house when you do your loan. Your seller/landlord will provide a payoff just like a bank and so yes, technically, the money you are paying is going toward your "downpayment" because you will be able to refi without any money out of pocket. In fact, depending on your value and equity, you might could get money back out. Be careful though, some lenders have restrictions on land contract "rent to own" properties.
- BarbaraLv 51 decade ago
You're asking if the landlord will hand you a $8,000 check so you can use it as part or all of the down payment on the mortgage loan? NOPE. It will come off the principal (the purchase price). Just the way they work.
Unless of course, the owner is your Mom, then anything is possible...:-)
- 1 decade ago
It's very unlikely that any landowner will allow all of your rent to apply toward the down payment. However, if you should find one that is willing, be sure to get it in writing at the time you Rent the property. Be sure all the details of the purchase are in writing up front before you move in on the rental period. Also, remember, the price of the property almost certainly will increase during the rental period. If you can get the owner to put your purchase price in writing up front, you will be money ahead.
- May I help You?Lv 61 decade ago
It depends.
You must negotiate your own deal. Whatever you and the seller determine is what goes for each portion of what you owe.
In a straight sale, that's what a mortgage does - as it has a predetermined amount that goes toward principal and interest.
GOD bless.
MBA-Boston Univ.
CPA-retired
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- rehrerLv 44 years ago
relies upon on the settlement. you have particular time to make money & than a cut-off date to make a lump-sum balloon paymentIf the balloon value is a factor of the settlement/value plan, no longer paying the balloon value cancels out the settlement & the settlement could be terminated & you would be left with hundreds of greenbacks of month-to-month money you already made with out domicile to own. ultimate thank you to look after your self is to have a assets lawyer seem on the deal/settlement in the previous you sign something.
- 1 decade ago
THIS MONEY IS GOING TOWARD THE PRINCIPAL OF THE HOMES PRICE. IT WILL NOT AFFECT DOWN PAYMENT MONEY. IF YOU WANT TO TALK MORE ABOUT THIS PURCHASE I CAN DEFINETELY HELP. EMAIL ME AT MINESBAY AT HOO
