Is renting to buy still an option?

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Sometimes the desire to own a home is so great that renters just can’t wait, even if they don’t have a down payment to buy a home. How do they do it? Through a contract with a seller called a lease-to-own agreement.
While it’s rare to see in a seller’s market when inventory is low, there are times when sellers will offer this arrangement. Basically, this is a delayed agreement to purchase the home in the future at a price that is fixed today.
How it works:
  • The amount of the rent is above the going-market rate.
  • Extra funds above the market rate will count towards the renter’s down payment in the future when the home is purchased.
  • Lenders typically still allow those above-market funds collected to count towards a down payment as long as everything is documented.