Homeownership is an essential component of the American Dream.
The feeling of independence, security, and stability that comes with owning one’s own home is invaluable.
The American people have a dream of growing up, settling down, and starting a family; they dream of having their own piece of land and being able to say with pride that it is theirs. “it’s mine.” Millions of families want a nice home, a white picket fence, a place to rest after a hard day of work, and a place to raise their families.
It’s no wonder that pioneers and settlers came to America to escape the over-crowded rental slums of the Old World and to tame and claim their piece of this vast land. Even today, newcomers to America are attracted here in part because of the opportunities for a better future — which includes owning their own home.
The American Dream Is Changing…
Even though owning a home is still very important to many people in the United States, the concept of the “American Dream” is shifting. There is still a sufficient amount of land and dwellings available, but the landscape is shifting to accommodate other reasons:
- There’s the growing number of Americans with credit problems — perhaps due to debt or poor choices or difficult circumstances or even just low paying jobs.
- There’s the growing number of banks that reject loan applications because they don’t meet the bank’s tightening loan requirements.
- There’s a trending increase in the number of lower-paying jobs, while higher-paying jobs are vanishing or being outsourced overseas.
- And the economy is on shaky ground, with one recession barely over and another one threatening to strike.
Although these might not be ideal circumstances, this is the reality we live 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.
- House sellers are trying to find creative ways to sell their house because there aren’t as many buyers.
This inventiveness has resulted in the creation of a new opportunity for individuals to purchase homes, even in the event that they are unable to submit an application for conventional loans. And this is how the American Dream is changing: people still aspire to own their own homes (and they can! ), but there are new ways to buy homes….
Rent to Own Housing in Gloucester County and Other Areas
In a traditional house purchase: the buyer goes to a bank, pays 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 period of time while they build up their credit so they can quality for a mortgage loan.
This works well for everyone!
- For the seller, it gives them access to more potential buyers.
- More importantly, for the buyers, it creates a new way to get into a house sooner — a permanent address in the house you’re likely going to buy, a sense of ownership before you even own the house, and an opportunity to work on your credit.
- Banks love it because it means more people can qualify for loans, too!
Imagine this for a moment: if you are someone who has always dreamed of owning a home but you are currently unable to obtain a conventional bank mortgage, you may have believed that the day you would finally settle down in a home of your own would not come for several years. But this doesn’t have to be the case: you can move into your long-term residence right away, immediately experience the pride that comes with ownership, and in addition, you’ll have a permanent address (which can help to contribute to a higher credit score).
What are the Costs of Rent to Own Housing in Gloucester County?
A buyer would move into a home, pay rent, and build credit towards a down payment on the home over the course of a rent-to-own agreement, which would allow the buyer to eventually purchase the home. This is an excellent choice for individuals and families who might not have the required credit score to qualify for a conventional mortgage.
Each rent-to-own arrangement is going to be governed by the specifics that are described in the agreement, and the price can vary widely depending on a number of different factors. In any case, this is the kind of thing you should be looking at…
First, you’ll pay a regular rental amount (just as you would if you were renting anywhere). This amount goes towards the rent and upkeep of the property, just like a regular rental.
Second, the costs of rent to own housing in Gloucester County may be higher in some areas… but for a very good reason.
There is a possibility that the rent that you pay for a property that you rent-to-own will be slightly higher than the rent that you would pay for a property that you would rent elsewhere. This can be the case as a result of a number of different factors, some of which include the location of the house, the condition of the property, the length of the rental period prior to purchase, and other factors.
You also have the opportunity to buy the property at the end of the rental period thanks to the lease option provision in the agreement, which gives you this opportunity. This is already factored into the cost of rent, and in some cases, a portion of your monthly rent payment will be put toward a down payment on a house that you purchase after moving out of the rental unit. (Before making any assumptions, it is best to verify this information with the landlord, as this is not necessarily the case in all situations).
For illustration purposes, you rent a house that is $1,000 per month when the average rent for homes in the neighborhood is $900. However, this additional $100 is put toward your down payment, and it will continue to do so month after month for the next three years, until you are finally ready to buy 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 Gloucester County when you’re looking to buy.
Even though it is possible that you will pay a slightly higher amount each month to rent to own a home in some circumstances, the savings you could realize over the course of the long term could be significant. This is due to the fact that a large number of sellers will set a predetermined price on the house, thereby securing protection against fluctuations in the housing market.
As an illustration, you have made a commitment to rent-to-own a property for a period of three years before exercising your option to buy the property. At the conclusion of the term, you and the seller come to an agreement on a price of $200,000 for the property. Suppose that when the term of your rental agreement comes to an end, the housing market has become extremely competitive, and the homes in the neighborhood are selling for $300,000. By renting with the option to buy and then locking in the purchase price, you will be able to cut the cost of your new home by a whopping $100,000.
Rent-to-own is a fantastic new way for families to get their own piece of the American Dream even when circumstances in the past have prevented them from doing so. This is a way that families are getting their own piece of the American Dream.