Rent to Own
Example
You agree to a three year term with a $10,000 down payment on a $328,000 house
Monthly Payments
$1,600 Monthly Rental Rate
$ 500 Monthly Option Credit to purchase
$2,100 Total Monthly Payment
Accumulated Down Payment
$10,000 Initial down payment
$18,000 Option credit accumulated over the term ($500×36 months)
$28,000 Total down payment paid over the term
Purchase Price balance at the end of the term
$328,000 Agreed purchase price at the end of the 3 year term
$ -28,000 Minus down payment accumulated over the term
$300,000 Balance owing, this amount will be financed with a mortgage
Expenses moving forward
After refinancing your monthly house payment will be approximately $1,775
$1,520 Monthly mortgage Payment (35 year amortization at 5% interest rate)
$ 180 Approximate monthly tax payment
$ 75 Approximate monthly Insurance payment
$1,775 Total monthly house payments
