Beware The Pitfalls Of Rent-To-Buy Schemes

For long-time renters with little savings, a rent-to-buy agreement may sound like the perfect solution.

However, there are several things to be aware of when considering such a scheme.

A chat with your mortgage broker would be the best option to help with uncovering some of the dangers associated with rent-to-own offerings, but here are some main points to remember.

There are few, if any, safeguards for buyers who engage in these kinds of agreements and it is difficult to gauge whether the vendor is genuine.

Interest rates on home loans will likely be one-to-two per cent higher than regular mortgages and rates associated with the transaction will almost always be higher.

Perhaps, most importantly, you do not own the property until the full purchase price is paid and you are therefore not eligible for any grants or concessions until the title deed is transferred to you.

It is also important to note that if something does go wrong, you have very limited legal rights in any action you wish to take.

To get more detailed information on your situation, talk to a Loan Market mortgage broker today.