Rent To Own Homes: Understanding Rent Credits

House-Made-of-Dollar1Did you know that when you rent to own a new home, you can often lower the purchase price just by paying your rent on time each month during your lease? This is called a rent credit program, and can be a great way to save money on your new home.

How Rent Credits Work

If you’ve negotiated rent credits as part of your contract, it will work something like this:

  • The owner agrees to take a specified amount off of the purchase price each month you make your rent payment on or before the first of the month.
  • You make timely rent payments, and a tally is kept of the rent credits you’re earned.
  • When you’re ready to purchase the home, the total of your rent credits earned are taken off of the final purchase price as agreed, and 100% of your initial down payment goes toward the new, lower cost of the home.

Negotiations Are Key

It’s important to remember that getting a rent credit each month isn’t a guarantee. You’ll need to discuss it with the seller BEFORE your contracts are signed. Remember, the more you are able to put down as your option fee/down payment, the more flexible sellers are likely to be when negotiating contract terms. To learn more about rent credits, contact us today!

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