The Foreclosure Crisis Of The United States

1075 WordsDec 8, 20145 Pages
After the United States suffered one of the biggest foreclosure crisis in its history, countless of American homeowners were forced out of their homes when the economy collapsed. In a slow and often painful recovery process, many are battling continued high interest rates and home prices in attempt to get back their families back into a normalcy of life. As a solution to the ongoing ownership dilemma that many currently face, the concept “rent-to-own” has come into the economic limelight. This resolution has started to be viewed as a realistic option to regain ownership and improve quality of life after the fallout of the foreclosure catastrophe through benefiting both buyer and seller of real estate. Renters have a wide variety of…show more content…
When paying the commission of a realtor is no longer an issue, the seller is more likely to pass along the savings to the buyer and lowers the price of a home even more. Once both parties agree on a “rent-to-own” payment option, the potential monetary saving that is available to the buyer develops into realistic saving and also the development of investment. Upon agreement for this “rent-to-own” payment process, a potential buyer must meet monetary checkpoints that lead to further saving and increase of investment. Two key factors come into play through this payment method, option consideration and rent credit. Option consideration is a 2.5% to 7% of the total lease purchase price that is paid up front to the seller as an incentive to agree to the “rent-to-own” process (Tuman). Although it is more expensive up front for the buyer, this option consideration is more beneficial than it first appears. Upon the payment of the option consideration the negotiated price of the home is set, the right to buy the house is securedand rent credit becomes available. Rent credit is another aspect of this payment that is more expensive butis more beneficial than it first appears. Rent concept is the idea that is a buyer pays a higher monthly rent that incorporates a percent that acts as additionally credit, this additional money per month goes to the final payment of the house. This concept has the ability to lower the lease purchase price down several thousand dollars
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