Rent To Own is a stepping stone into home ownership. The interest rate is usually higher so you would want to get yourself to refinance as soon as possible. There are a few ways to do this:
- Stay in the home until the property increases in equity and/or
- Improve the value of the property so that it increase in value and/or
- Pay a higher amount until you are able to refinance.
If you are looking at buying and selling within a year, then it probably isn’t for you. Even if you are very experienced at renovating, it takes a while before you can make a profit because you would still need to recoup your costs of renovating and also cover your costs of stamp duty.
If you intend staying in it for more than a couple of years than it is probably worth it for you, PROVIDED you have an exit strategy. You must know what you will need to do to refinance. For self-employed people it is usually getting your taxes done. For credit impaired it is making sure that you clear your credit and for people that do not have enough deposit, you make sure you increase the equity in the property or save up or pay extra on the property to get ahead.
Make sure that you use it for a stepping stone until the property is entirely under your name, with the aim of refinancing. You need to ‘keep your eye on the prize’ so to speak and make sure that you are meeting the requirements of refinancing. Right now is a great time for refinancing as the interest rates are low and property is higher. All the lenders are offering great deals to owner occupied properties.
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