Home Ownership Trends Are Shifting… Keep Reading To Find Out How They Might Make Owning A Home In Portland Even Easier…
The landscape of homeownership trends is undergoing a transformation. Continue reading to explore how these shifts might pave the way for a more accessible path to owning a home in Portland.
Once dominated by credit-score-based mortgages as the primary avenue for home purchases, traditional methods are witnessing a decline in prevalence over the decades. While the essence of the American Dream remains steadfast, the concept of homeownership is evolving.
Amidst a tightening loan approval process by banks and a lingering aftermath of the recession, with individuals still recovering from credit challenges, alternative avenues for home acquisition are gaining popularity. Some turn to these alternatives due to credit constraints, a loss of trust in banks, or simply a realization that unconventional methods exist.
In recent years, there has been a significant surge in renting apartments and houses. Concurrently, the lease-to-own model, often referred to as Lease Option, has emerged as a favored approach for families looking to purchase a local Portland OR house directly from a seller. This process typically involves a rental period lasting 12-24 months, providing a less stringent qualification process compared to traditional bank procedures.
As with any evolving trend, rent-to-own housing in Portland OR has its share of pros and cons, which we will delve into in this article.
It is crucial to meticulously review every detail of any contract before signing. If you encounter any uncertainties or complexities during the process, seeking guidance from a financial advisor or a rent-to-own expert is recommended. A thorough understanding of the terms and conditions ensures a smoother transition into homeownership through alternative means.
Pros of Rent to Own Housing in Portland OR — Why It Can Be A Better Option
Easier Qualification
The largest hurdle to home ownership is usually qualifying for a loan for the house.
In the aftermath of the recession, lenders have progressively tightened their criteria regarding income and assets for loan approval. Given the current economic climate, numerous Americans find it challenging to meet these increasingly stringent requirements. In a rent-to-own scenario, the seller has the flexibility to establish contract approval guidelines, which are typically more reasonable compared to the stringent criteria set by traditional banks.
Consequently, entering a home through a rent-to-own arrangement usually involves a significantly lower upfront payment. Moreover, the process is streamlined, bypassing the intricate steps required for qualifying for a traditional bank loan. This offers a more accessible avenue for individuals seeking homeownership, circumventing the challenges posed by the stringent standards set by conventional lending institutions.
Time to Improve Your Credit
Throughout the rent-to-own or lease option agreement, which typically spans 1-5 years, you can actively work on improving your credit score. This strategic timeframe allows you to position yourself to secure a home loan and ultimately purchase the property when the agreement concludes.
Engaging in credit improvement efforts while residing in your prospective future home offers a dual advantage. As the lease period progresses, not only do you have the chance to save for a down payment, but you also aim to enhance your credit rating. The ultimate goal is to elevate your creditworthiness sufficiently to qualify for a traditional mortgage from a conventional bank once the lease option period concludes. This proactive approach provides a comprehensive strategy for both financial preparation and credit rebuilding, setting the stage for a successful transition to traditional homeownership.
Cons of Rent to Own Housing – Some Drawbacks
Rent Can be More Costly
In the context of rent-to-own scenarios, both in Portland and across OR, sellers often have the flexibility to set a higher monthly rental rate, considering the embedded option for the tenant to eventually purchase the property. While this arrangement presents an opportunity to secure a home, it’s crucial to acknowledge that if the buyer doesn’t exercise the purchase option at the agreement’s conclusion, they may have incurred a higher cost for residing in a home without the ultimate benefit of ownership.
So you need to be sure that you’re serious about potentially purchasing this house at the end of the rent to own agreement… otherwise you’d be better off just renting a house through the normal rental channels.
Lease Cancellation
Buyers must beware the risks involved with lease cancellation, eviction, and other factors when considering a rent-to-own home. If a buyer is late on payments or breaks the lease in any way, the option to purchase the home may be lost, and they will have forfeited all fees and additional rent they’ve paid for the ability to purchase at the end of the term.
So same goes here as in the first drawback… if you’re wanting to rent to own the house… be serious about it and use this as an opportunity to improve your credit and earn your way into a great house you’d love to own.
For many Portland OR residents who can’t get a traditional bank loan to buy a house, the Pros and Cons of Rent to Own Housing In Portland are clear cut.
If you don’t have the credit or don’t have a huge down payment… but want to experience the feeling of “ownership” while you work on purchasing that house… looking for great rent to own houses in Portland may be the preferable choice.
If you’re not fully committed to improving your financial situation, your credit, etc… doing a rent to own may not be the right fit.
Rent to own is an attractive option for many Americans. By knowing what you’re getting into, you have a prime opportunity to buy your dream home without meeting the often unrealistic standards set by traditional mortgage lenders.
Have Questions On How Our Local Rent To Own Program Works?
If you have questions about the rent to own / lease option process works… we’re here for ya!
Just click the link below to see our available properties… or connect with us by calling us at (503) 893-9107 or through our contact page on this website.