Tired of paying rent without building equity? Trying to purchase a home but daunted by the down payment involved? Rent-to-own, also known as lease option buying, might be the best route for you!

With a lease option, the owner generally collects a larger-than-normal initial deposit. This deposit is held by the owner and will be applied to the tenants' eventual down payment. Also, the monthly rent payments may be above the current market rates, but in most cases that additional rent also is applied toward the eventual down payment.

At the end of the option period, usually a year, the tenant then has the opportunity to use the accumulated money as a portion of their down payment and closing costs and purchase the home at a pre-determined price.

There are some risks with a lease option: 1) if the tenant decides not to buy the house, the owner keeps the additional deposit and rents collected. 2) the eventual purchase price usually is higher than current market prices because the owner is locking in a certain rate of appreciation. 3) unless specified in the rental contract, the tenant also could lose their additional deposit and rents if they're unable to qualify for a loan at the end of the option period.

Still, rent-to-own remains a viable option for many homebuyers who may not have the accumulated savings to cover a down payment and closing costs.

For more information on rent-to-own buying, e-mail me using my contact form or call me at 602-502-9693.

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes

It's been my experience that many homebuyers aren't stymied by the possible monthly payments as much as by the down payment and closing costs associated with owning a home.  Nearly everyone pays at least something to live where they do - even if they're still at home with their parents - but not everyone has the thousands of dollars needed to move into their first or next home.

Fortunately, several lenders offer zero-down financing programs. With zero-down financing, the full price of the home is financed, leaving the buyer to pay only for closing costs and prepaid items such as termite inspections, professional home inspection and the appraisal.

In addition to loan costs, closing costs also include escrow fees - title insurance, fees charged by the title company, etc. But it's not uncommon in the current Phoenix market for sellers to agree to provide buyers with closing-cost assistance.

Some sellers will accept an offer with the closing cost assistance built in to the offer price while other sellers expect the buyer to raise their offer price before paying for closing costs - in other words, the buyer is financing his closing costs as part of the loan (as long as the property appraises for the higher amount.)

For more information about zero-down financing, please e-mail me through my contact form or call me at 602-502-9693.

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes