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Transcript of Rent-To-Own
When might a consumer seek this type of credit?
Type of Alternative Credit
What is it?
What are the source(s) of this type of credit?
Cite your research with at least two reputable sources.
What are disadvantages of this credit?
What are three alternatives consumers should consider before using this credit?
What is the average APR and/or fees paid?
How are interest rates and fees calculated in Rent-To-Own?
What are advantages of this type of credit?
Rent-To-Own is a type of credit that is a legally documented transaction under which tangible property is leased in exchange for weekly or monthly payment
When calculating Rent-To-Own, you determine the purchase price, option price, interest rate, market rent, and premium rent on the home.
On average, rent-to-own fees are about $272,900.
Example sources of this type of credit are:
FoxyHomes - Rent to own Homes
JSC Rent To Own Homes
http://www.generalnonsense.net/showthread.php?t=7775 (forwarded to: http://www.census.gov/const/uspriceann.pdf)
Easy Home: http://easyhome.us/easyhome_us/home_us.aspx
Whenever a consumer wants to rent a piece of property and they don't have good credit, they might want to consider Rent-To-Own.
Buyers have time to build income and repair their credit history as they rent the house
Can be an easy, low-stress, inexpensive way to buy, sell or invest in real estate
The buyer has full control of the home while paying rent.
Renters can walk away if they find something seriously wrong with the house. Although the renter will lose the option fee and all their rent credit money.
Buyers still have to pay the upfront option fee.
If the seller fails to pay the original mortgage on the house, it may be FORECLOSED and the buyer forced to move.
Examples of alternatives of rent-to-own include:
Using a handed down computer as opposed to buying a brand new one.
Renting a car instead of buying it in payments (of in full if you can afford it).
Renting or borrowing a textbook from the library (or friend) instead of buying it