Rent to Own in Alabama

If you’re tired of renting and want to own a home, but your credit, lack of down payment, or income hold you back from qualifying for a normal bank loan. A “rent to own”, often called “lease option” or “lease purchase” may be a great fit for you.

We specialize in helping Huntsville residents earn the satisfaction of being a homeowner through our Huntsville Rent To Own Home Program.

close-up of couple holding a key to a rented house. Questions to ask when renting a house

What is Rent to Own?

We acquire houses every month from homeowners who need to sell for one reason or another. Often times we remodel the homes to bring them up to date for a new rent to own tenant/buyer like yourself to move into.

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How Rent to Own Works:

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Send Over Your Information

Submit your information by filling out the contact form above and we will contact you to find your perfect home.

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We Buy Your Perfect House

We will make a cash offer on an eligible home of your choice. If successful, you can move in right away.

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Rent Until You Are Able To Buy

Enjoy your new home, at the end of your lease term, you can renew, or simply walk away with no penalties.

Benefits Of Rent to Own in Alabama

-You get to lock in the house that you want to buy

-It gives you time to raise your credit score

-It gives you time to save for a down payment

-Locks in a price while prices of homes could be going up

-Portion of your rent goes towards the final price of the house

Common Questions You Might Have on Renting to Own:

Renting to own is not a new concept. It started back in the 1950s - 1960s. Rent to own originated from Europe and the UK. Even though rent to own can be used in most transaction types (ie. goods) it is used a lot in real estate scenarios.

Most homebuyers need a mortgage in order to finance the purchase of a new house. Mortgage qualification requires that you have a good credit score and liquid cash for a down payment. Without these qualifications, then the traditional route to buying a home may not be an option.

But there is an alternative; a rent-to-own agreement. You rent a home for a period of time, before the lease expires you have the option to buy it. Rent-to-own agreements are made up of two parts: a standard lease agreement and an option to be able to buy.

Do I Need a Realtor for Rent to Own?

No, you don't need a realtor for rent to own. Most realtors won't work with rent-to-home scenarios because they will not make a commission on it.

Does rent-to-own work if you have bad credit?

Rent-to-own can be a more viable option than a mortgage for those with bad credit, as some sellers may only check to ensure your credit is high enough to qualify for a mortgage by the end of the lease. Your credit score may be low when you first enter a rent-to-own agreement, but as long as you work to build your credit during the lease, you should be able to qualify for a mortgage by the end.

What do I need to rent to own?

The price of a rent-to-own home really depends on the market value of the home, so this is influenced by the age, size, location, and so on. The rent is fair market rent plus the premium payments. The option fee is less than five percent of the purchase price of the home.

For example: On a $100,000 home, the option payment would fall between $1,000 and $5,000.

Based on the fair market rent in the area, the monthly rent payment would be determined. After then, it will be up to you and the seller to decide whether or not to incorporate premium payments in your contract. If you do, you will receive rent credits based on the additional monthly payments you make. You can work out a deal with the vendor so that your payments are matched. After that, those funds will be returned to you and count against your down payment.

How do I qualify?

To qualify as a lease, most sellers will ask for proof of income stability, a clean background check, and a credit score that can improve quickly to qualify for a mortgage within the lease term. Financial requirements may also need to be met.

How does a lease option to purchase work?

The lease option to purchase, or rent to own, works when a tenant leases a home from someone that wants to sell his or her home. Therefore, the tenant is leasing (renting) the property with the option to purchase it after a chosen date. This option is made available by paying an "option payment" at the start of the lease, and also the tenant pays premium payments each month. To start a lease option to purchase, the tenant and the landlord must sign an agreement. The tenant then pays the "option fee," which will be about 3 to 5 percent of the home's purchase price.

Is Rent to Own Safe?

Rent to own is a safe option if you are aware of the risks involved. Here's a good example: You must make sure that you will be able to qualify for a loan at the end of the lease so make sure you are certain that you can raise your credit score. The risk would be Otherwise, you lose the extra money that you put in: option payment and premiums because you didn’t end up purchasing the home.

How do you rent to own a home?

To rent to own a home, you'll need to find a seller who's willing to sign a lease-option for their property. You'll start the lease with an option to purchase by paying an option payment and rent at a small premium. Sometimes, you can purchase the home at any point during the lease or after the lease is done. The premium paid on the rent and option payment that you paid, in the beginning, will be credited to your down payment.

Can you rent to own with a low income?

If you have low income, you should try to negotiate with the seller so that your rent and premium payments together don't exceed 30% of your income each month. Also, you should look for a home that you can afford on your current salary. Before renting to own, you should meet with a mortgage broker to make sure that you will qualify for a mortgage at the end of the lease. Otherwise, you will be wasting your income on the premiums because you will not get them back if you don't qualify.