Owning a home of your own — it’s part of the American Dream!
Home ownership gives people a sense of freedom, security, and permanence.
Americans dream of growing up, buying 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 to own a nice home, with a white picket fence, a place to rest after a hard day of work, and a place to raise their family.
It’s no wonder why pioneers and settlers came to America to escape the over-crowded rental slums of the Old World and to tame and claim their own piece of this vast land. Even today, people coming to America are attracted here because of the opportunities for a better future — part of which includes owning their own home.
The American Dream Is Changing…
While owning a home 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 due to other reasons:
- There’s a growing number of Americans with credit issues — perhaps due to being in debt or making poor choices or experiencing difficult circumstances or even just having low paying jobs.
- There’s a growing number of banks that reject loan applications because they don’t meet the bank’s strict loan requirements.
- There’s a trending increase in the number of lower-paying jobs, while the number of higher-paying jobs are vanishing or even being outsourced overseas.
- And the economy is on shaky ground again, with one recession barely over and another one threatening to strike.
Although these may not be ideal circumstances, this is the reality we’re living 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 right now.
- House sellers are trying to find creative ways to sell their house because there aren’t as many qualified buyers.
This creativity has led to a new opportunity for people to buy a house even when they may not be able to qualify for a traditional loan. And that’s how the American Dream is evolving: people still want to own a home (and can!), but now there are new ways of being able to buy those homes…
Rent to Own Housing in San Antonio and Other Areas
In a traditional home purchase: the buyer goes to a bank, makes a down payment, and gets a mortgage loan for the remainder of the amount owed on the house they’re buying.
In a rent to own agreement: the buyer who may not have perfect credit works directly with the house seller – – to rent a house for a specified period of time while they work to build up their credit so they can quality for a traditional mortgage loan.
This works well for everyone!
- For the seller, by giving them access to more potential buyers.
- More importantly, for the buyers, by creating a new way to get into a house sooner — a permanent address in the house they’re likely going to buy, a sense of ownership before they even own the house, and an opportunity to work on their credit.
- Banks love it because it means more people can qualify for loans, too!
Just imagine: if you’re someone who wants to own a home but you can’t get a traditional bank loan right now, you may think that living in a permanent home is still years away. Well it doesn’t have to be that way: you can get into your permanent home right now and enjoy the sense of ownership right away, PLUS you’ll have a stable address (which can help contribute to a higher credit score).
What are the Costs of Rent to Own Housing in San Antonio?
In a rent to own agreement, a buyer moves into a home, pays rent, and builds their credit towards having a down payment to ultimately purchase the home. This is a valuable option for families who may not have the necessary credit score to qualify for a traditional mortgage.
The price varies widely, depending on a number of factors, and each rent to own arrangement will be governed by the details described in the agreement. But, in general, this is what you’d be looking at…
First, you’ll pay a regular rental amount (just as you would if you were renting anywhere).
Second, the costs of rent to own housing in San Antonio may be higher in some areas… but for a very good reason. In some cases, rent to own rental amounts may be slightly higher versus rental rates you get elsewhere, and this is influenced by a few things — such as the neighborhood the house is in, the condition of the property, the length of the rental period before purchase, etc.
And then there’s the lease option portion of the agreement, which allows you to buy the house at the end of the rental term. This is built into the cost of rent and, in some cases, a portion of your monthly rent may be applied to a down payment on the home. (Check with the landlord because this is not always the case).
Example: You rent a house for $1,000 even though other houses in the area rent for $900. This extra $100, though, may be applied to your down payment and can accumulate month by month for the duration of the agreement until you are ready to purchase the house.
Important: these vary from one rent to own seller to the next, so make sure you talk to the seller about how the costs of rent to own housing in San Antonio are when you’re looking to buy.
While it’s possible that in some cases you may pay slightly more to rent to own a home each month, the savings in the long term could be significant. This is because many sellers will set a predetermined price on the house, locking in protection against housing market fluctuations.
Example: You’ve agreed to rent-to-own a home for three years, before exercising your option to purchase. You come to an agreement with the seller on a price at the end of that term of $150,000. Let’s say that at the end of your rental term, the housing market becomes extremely competitive and surrounding homes are now selling for $200,000. As a buyer, you’ll be saving $50,000 on the cost of your new home simply by renting to own and locking in the price.
Rent to own — it’s a great new way that families can get their own piece of the American Dream even when circumstances may have prevented them from being able to do so in the past.