Rent-to-own defined


Rent-To-Own Defined

What exactly is Rent-to-Own? The phrase Rent-to-Own means a lease combined with an option to purchase the premises, within a specified time period, for an agreed-upon price.

Why Would Someone Be Interested in Rent-to-Own? Because it provides a path to home ownership when available funds for a conventional down payment are not sufficient, and/or time is needed to repair your credit rating.

How Long is the Rent-to-Own Period? It’s flexible and negotiable between you and the premises owner. Depending on your personal readiness and how much down payment needs to build up, the Rent-to-Own period could last a handful of months to 12-18 months.

Usually, a shorter period of time is preferred by the property owner. He or she typically wants to sell the property as quickly as possible. A shorter period of time can also be beneficial to the purchaser too, because the sooner you get out of a rental situation and into ownership, the better. However, most purchasers enter into Rent-to-Own because they need time to build up the down payment and repair their credit, and sellers understand this.

How Do I Qualify?

Getting Started Rent-to-Own agreements typically require a 1%- 5% down payment or “option fee” to the seller, which is much less than what would be required for a traditional down payment in conventional financing. That fee is generally non-refundable but it is applied toward the purchase of the premises at the end of the Rent-to-Own agreement.

Other than this small down payment, all that is required monetarily is a security deposit similar to most other rental situations.

Anything Else? A credit check is commonly run as part of the application process. It is up to the seller to accept or deny individual applicants.

What If I Have Challenged Credit? Challenged credit is one of the reasons people participate in the Rent-to-Own program. Sellers who accept Rent-to-Own applicants understand this.

Challenged or damaged credit is probably the situation most of us are in today.

It can be done:

      • Delinquents
      • PayLates
      • Collections
      • Medical
      • Bankruptcy
      • Foreclosure
      • Not enough credit history


Recently, lenders have tightened the criteria to obtain a loan, making it more difficult to finance. Key to understanding if Rent-to-Own might be workable in your situation is an honest evaluation of your credit rating. If you have the type of challenged credit that might currently be keeping your from qualifying for a loan, but that can be repaired within about a year’s time with hard work and resources we can provide, Rent-to-Own will probably be a good match. More serious credit challenges can also be eventually overcome but might require a longer period of repair and healing before Rent-to-Own would work. We have resources for those situations, too.

What About Bankruptcy? Individual situations always vary, but generally speaking, we can work with people in Chapter 13 if they are currently in their payment period or beyond. People who have had a Chapter 7 bankruptcy must wait two years after discharge.

What If I Do Not Have Problems With My Credit? Many people choose Rent-to-Own not because of challenged credit, but because they lack a down payment. You might have good credit without even knowing it.

1.     Good does not have to mean perfect.

2.     A score of 620 gets you started with most lenders.

3.     Might help you buy immediately or greatly shorten the Rent-to-Own time period.

4.     Mortgage interest rates may remain very low at this time.


You may be able to buy and bypass the Rent-to-Own program without even knowing it!

 How Does It Work?

How Much of the Rent Goes Toward the Down payment? In order to comply with the law, the portion of the monthly payment that goes toward the down payment must be a dollar amount above the market rent for the area. So, as an example, if the market rent for a particular type of property is $800 per month, the total monthly payment you’d make might be $1,000, with $200 going toward building up your down payment. That extra amount per month is called a “rent credit” and is credited toward the final payment due at the end of the lease.

So I’m Renting and Building Up a Down payment and Repairing My Credit. Then What Happens? Your Rent-to-Own specialist at B&G Real Estate Consultants will always be available to help and check on your progress. The goal is to finish the lease period with a sufficient down payment built up and a credit record that makes you eligible for a loan to complete the purchase.

Where Do I Get That Loan? Lending resources are plentiful, from nationally advertised mortgage companies to the bank in your neighborhood. We’re happy to make a referral to help you with financing. We’re currently working with many of the nation’s leading financial institutions.

Who Pays the Taxes or the Condo association fees while I’m Renting to Own? Typically, the seller.

Who Pays for Repair and Maintenance? This is usually negotiated between you and the seller.

 Help For You

Check out these resources:

1.     Free consultation with a lending professional to see if you qualify for financing.

2.     Credit repair program available

3.     Best selection

Specialists on Your Side

We’re with you every step of the way through the process. You’ve got the knowledge and power of and its  rent-to-own specialists. It only makes sense to deal with specialists. We know real estate!

Lender On-Site We’re proud to be partnered with some of the nation’s largest bank holding companies.

$8,000 Tax Credit for First-Time Homebuyers, Condos Included!

There’s another great resource we can help you with if you’re a first-time home buyer. It’s the $8,000 tax credit that’s part of the government’s economic stimulus program. Already, however, time is getting short.

 Benefits of Rent-To-Own




No need for a large down payment to start

Pick a favorite community

You’re a homeowner!

Challenged credit OK

Enjoy home ownership life right away

Cleaned-up credit gives you a fresh start

Down payment accumulates month by month

Work on your credit standing

You have more control than an apartment situation

Time span can be flexible, depending on your readiness

Use free resources to make you a better homeowner and financial consumer

A home is real property, an asset for you to use to your advantage

If You Don’t Purchase

What if I Change My Mind?

At the end of the Rent-to-Own period, you are not obligated to purchase. Keep in mind however, that your initial 1%-5% down payment and the monthly rent credit probably will be forfeited. The goal of the seller is not to provide housing for people who might, but might not, be interested in purchasing. The goal of the seller is to sell his or her property. Your goal as a participant in the process should be equally serious—to own. The Rent-to-Own option has been made available to help out all parties. A particular property does not have to be your home for the rest of your life, but it should be seen as far more than an apartment to “try on” for a period of time before moving on. Your B&G Real Estate Consultants Rent-to-Own specialist will help you find the right place based on the community, price, size and amenities you’re looking for.

More than Home Sellers

What If I Need a Condominium?

Our Rent-to-Own specialists are licensed Realtors® and can also help you find a rent-to-own house that meets your needs, depending upon availability in any particular location and your qualifications.

Let’s Get Started!

Here is all you have to do to begin.

1.     Give us a call at (260) 563 5700 and let us know you are interested.

2.     Tell us the specific or general area where you would like to live.

3.     Answer a few basic questions about your employment, credit situation and the amount you can afford to pay. There are no wrong answers! (see application)

4.     Let us get to work for you. Depending upon your situation, we have put you in touch with our preferred lender or make a recommendation for a credit repair counseling program.

All these services are FREE to you!

Restrictions may apply, of course, so call B&G Real Estate consultants at (260) 563-5700 today to learn more about this great opportunity.

But if you do have a question after reviewing this website please feel free to send me an email to, and I will personally answer you.

Contact us today!