Are Rent to Own Homes a Scam or Scheme?

It can be argued that the premise of buying a home as a Rent to Own is a scam or scheme. This is in fact not the case.

Whilst we do not deny that for some people a Rent to Own home does not work, for many people buying their home as a Rent to Own is a great opportunity. When a Rent to Own opportunity does not work it is easy to call it a scheme or a scam, but first we need to identify some of the reasons behind why it may not have worked for these people:

Did they make payments on time during the Rent to Own timeframe to ensure they had a great payment ledger to present to the financier? Did they borrow additional funds too close to the time of going for finance when the Rent to Own timeframe was nearly up, thereby increasing their level of debt & reducing the amount they were capable of borrowing for their home loan? Did they ensure that they provided the financier with regular savings in an account over & above the accrued credit for their Rent to Own home to be used as further deposit? (iv) Did they receive further negative action on their credit history after entering into the Rent to Own purchase which was unable to be removed prior to going for finance at the end of the Rent to Own timeframe?

Unfortunately if a person buying their home as a Rent to Own does any of the above the likelihood of attaining finance becomes harder.

In order to ascertain that a person buying a Rent to Own home from us in Mackay will be able to gain finance at the end of a Rent to Own timeframewe performthe following steps:

An Application Form needs to be completed by the prospective buyer We ask you to do a Credit History check on yourself & provide this to us

By doing the above steps we are able to tell if the home the person wants to buy as a Rent to Own home a) is affordable based on their existing income & their existing debt and b) we know upfront if they have anything on their credit history stopping finance now & we can work with them to either get this removed OR see in what timeframe the default will "drop off".

If you think you are falling victim to a Rent to Own scam there are a few things you can ask the person you are buying your Rent to Own home from to verify:

References these can be written but you can also ask for the name & phone number of someone to talk to who has worked with this person before. This way you can ask all the questions you need satisfied to assure you that this is not a scam or scheme. Can they confirm they have the appropriate licensing to sell a home as a Rent to Own? Ask them how they have put their documentation together to protect you the buyer under a Rent to Own purchase and what this documentation is.

Once you are satisfied that you are not entering into a Rent to Own scam or scheme if you choose to continue with the Rent to Own purchase seek independent legal advice prior to signing any documentation.

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