Leasebacks/rent-to-own is a type of scam where you are asked to transfer the title to your home to the scammer. The scammer will then, supposedly, obtain new and better financing and/or allow you to remain in the home as a renter and eventually buy it back. If you do not comply with the terms of the rent-to-own agreement, you will lose your money and face eviction. The agreement may be very hard to comply with, because it may require, for instance, high up-front and monthly payments that you may not be able to afford. In fact, the scammers may have no intention of ever selling the home back to you. They simply want your home and your money.
Remember that transferring your title does not change your payment obligations — you will still owe your mortgage debt. The difference will be that you will no longer own your home. If payments are not made on the mortgage, your lender has the right to foreclose, and the foreclosure and any other problems will appear on your credit report.
I can’t tell you how many calls a day we get from people looking for rent-to-own properties.
Rent-to-own is not necessarily always a great deal. There are many sellers who are honest, but in the long run the buyer usually ends up over-paying for the house. The bottom line is that rent-to-own is nothing more than a lease with a large down payment which usually is non-refundable. Sometimes you can find a seller that will apply a small portion of your monthly rent to the down payment for the house, which would be credited to the buyer at closing.
With today’s credit guidelines, and the many financing programs out there you may be eligible to purchase a home. Contact us today and let us help you explore your options. We can even help put you in touch with lenders you can speak with.