Minimum Cash Out Of Pocket

Our goal at Rent 2 Own Today is to educate you so that you can make the best decision for your family. Rent to Own is not for everyone, however, if at the end of our course you decide that Rent to Own is right for you, Rent 2 Own Today is here to help you acquire the perfect home that suits your needs.

Minimum Cash Out Of Pocket
Minimum Cash Out Of Pocket

Now, what exactly do we mean when we say Minimum Cash Out Of Pocket? What we are referring to is the down payment required when purchasing a home. If you were a first time home buyer and have great credit, you could walk right into a branch and get pre-qualified quite quickly. Now let’s say that you qualify for $300,000 and you wanted to put down the minimum amount of 5%, the down payment required would be $15,000 + closing costs which equal approx. $20,000. Now, when you step back for a moment and look at the big picture, $20,000 is not a lot of money when you look at the overall purchase price of the home.

Here is the issue….. although you are being put in control of a very expensive asset, $20,000 is not always that easy to save. I know, Darlene and myself were there when we purchased our very first home 15 years ago and it was tough!

Here is the second possible issue…. what would happen if you had blemished credit, bad credit or no credit at all?

If you or your loved one is in any of these three situations, the banks would now require a larger percentage down… typically 20% and charge you a higher interest rate. Using the purchase price of $300,000 you are now required to put down over $60,000! I’m not sure about you, but that is a lot of cash that many people cannot afford. Here is the worst thing about have poor credit, it does not matter how great your credit looked over the past 10, 15 or 20 years, if something happened last week to your credit score, that is what they go by for the next few years. Instead of looking at the whole picture, they look at the bump in the road and base your life on that.

Now, if you fall into any of the categories above, a Rent to Own company can help you to homeownership much faster then you thought. In many cases, you can start your path into home ownership with as little as $5000. I will give you 3 scenarios to provide you with a better understanding of the three most common Rent to Own situations. The prices will vary from different Rent to Own companies or private investors, however, these are the numbers we usually work with.

1. There is a home that has been purchased and the owner wishes to do a Rent to Own to help a family. Down payment starts at $5,000
2. You and your family go out and select the home of your choice in the area of your choice. Down payment amount starts at $10,000
3. You currently own your own home, have run into financial difficulty, need to sell, however, would like to remain in your home = $15,000

As you can see, in a Rent to Own program, the down payment required to start living in your dream home is much less than the conventional way and the best part is you can have poor credit as well. It is a much better way then just renting and having nothing to show for it at the end of the day. Another key thing to remember is your down payment is yours and will be used towards the purchase price of the home once your credit has been restored.

The last key factor to remember is that the numbers above are not set in stone and can always be negotiated. Every families situation is unique. Rent to Own is a win-win program if done right. The down payment shows the owner that you are serious about getting into home ownership. The owner is also looking for a future homeowner who is going to look after his/her property until a transfer of title is complete. Once this happens, the owner then purchases another home in order to help another family that is also serious about changing their lives or need assistance with a second chance.

Written by Gary Hibbert – Real Estate Investment Advisor –

Brian Donaldson

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