Rent to Buy Your First Home – 10 Ways You Benefit

It won’t be long before the whole of the UK gets on board with using “Rent to Buy” as a prime way to buy property, because of the massive benefits for the incoming home owner. Based on my own experience of working with home buyers, here’s a list of the Top 10 Benefits… not in any particular order, so you can decide for yourself.

You only need 3-5% “get started” money.

I have lost count of the number of first-time home buyers who tell me they feel like they’re moving further away from their dream, because of the deposit demands of the high street banks. True to say, you’ll need anything up to a 25% deposit to get the best mortgage rates right now, and saving THAT much money in a recession is a really tough ask. A typical Rent to Buy scheme only asks the tenant-buyer for a far more affordable 3-5% of the home’s value to get started, giving a significant advantage over traditional loan terms, and offering a much more achievable target for getting on the property ladder.

You don’t need a mortgage today.

That’s right… a typical Rent to Buy scenario lets you move into the home straight away, without all the delays and hassles of getting a mortgage from the outset. This is normally because the home has been purchased with private funding, or sometimes leaving the asset of the previous owner’s debt in place for the period of the option term. This time lag allows the incoming tenant-buyer the luxury of applying for finance at a time most suitable for them (for example; when a great mortgage product is being promoted, or when their savings are at an optimum level).

You can build up a payment history as you go along.

There is a little understood barrier, particularly amongst first-time home buyers, around the issue of their credit rating. To have the BEST credit score (and therefore be an appealingly low risk for the banks ND gets their best loan interest rates) you actually need to have a history of borrowing and successfully paying back money. By taking a Rent to Buy option, a track record of paying monthly outgoings such as utility bills, council tax, rent and option fees builds up, increasing the chances of a successful finance application when the right time arrives.

You can start buying while your credit rating repairs itself. So… you’ve been a bit unlucky in the past, and maybe missed a couple of regular payments that has spoiled your credit rating for a while. Should that mean that you’re denied the opportunity of home ownership? With a Rent to Own property the answer is firmly NO. Of course, you would expect to discuss these matters with any potential landlord or seller, but if you can satisfy some basic criteria and demonstrate steady employment, earnings potential, and a commitment to clear the slate of those old misdoings, there is no reason why you can’t be a home owner and start the buying process straight away.

Buying Your First Home the Right Way

The housing market is currently offering the best deals for buying your first home. It has never been a better time to take advantage of low mortgage rates, low housing costs, and many homes to choose from. Here are some tips for taking advantage of these benefits when buying your first home.

Start Your Search

Decide what kind of home and neighborhood you want to live in. Then start searching. Performing online real estate searches is the best way to begin looking for a home. Browse thousands of home listings, take virtual tours, and view pictures of homes. Check out the neighborhoods that the homes are located in, and be sure to read reviews of the surrounding areas before buying. If you have picked out a few homes that you might be interested, contact the listing agent about a showing.

Seeing a Home

Showings are free, apart from the gas and travel costs. However, do not expect to see twenty homes in a day. You will start to feel tired, cranky, and not remember most of the homes’ details after the first ten. Ask the agent to show you five homes you are interested in buying, and rank them in order of most important to least. Make sure you get to the homes you really want to see first.

Take notes, and pictures, if you are allowed. Think about the details, and ask questions. Look for unusual features, such as design, odd angles, and things that make the house unique. If you see something that might be an issue, bring it up with the agent. Issues such as past electrical problems, plumbing, and a crumbling foundation can be costly mistakes in the future if you don’t ask up front before buying.

How to Buy Your Favorite

Experts argue about the best time to buy a home after a showing. Should you buy the first home that you like that is in your price range, or should you keep looking at other options first? Some good advice is, if you love the home, go for it. The house may be sold right from under you if you wait too long. If you simply must view the home one more time before buying, do it as quickly as possible. Be sure that the house is absolutely available for sale before committing.

If your heart is set on your favorite home, next is the time to sit down and look over a buying contract. Ask the agent to fully explain each part of the contract to you, and gain outside advice, especially if a mortgage is attached. You want to make sure you fully understand the contract and are able to meet it. Buying your first home can be a thrilling, once in a lifetime experience. The process of finding the home of your dreams, seeing it in person, and eventually buying it can never be replicated. Make sure that you are buying the right home for you by doing all your research and asking all of the questions that you can. Happy hunting!