what is the difference between rent-to-own homes and those that you get...

[miksha]

what is the difference between rent-to-own homes, homes through loans in banks and in-house financing? kapag hindi ako nakabayad sa bank kukunin na nya ang aking house (wala akong makukuha na anything?) kapag in-house financing and rent-to-own ganoon din ba?

[aquacharly]

what is the difference between rent-to-own homes, homes through loans in banks and in-house financing? kapag hindi ako nakabayad sa bank kukunin na nya ang aking house (wala akong makukuha na anything?) kapag in-house financing and rent-to-own ganoon din ba?

Rent to own is just like lease-purchase.
You do not have to decide to buy before moving in.  You are given a period of time to think it over, then a portion of your rentals is applied to the total purchase price; and your contract is converted to a Conditional Sale one, or something like that.

As long as you borrow money to acquire a home... whether it is in-house financing, or through a bank loan, whether it is outright purchase or a lease-purchase... basta you do not pay... after a certain no. of  unpaid amortizations, the financier will move towards foreclosure.  So read the fine print well.

Now, if you borrow from relatives.. you may have a bigger leeway in case of nonpayment.  But eventually, the ax will fall.. they will move to recover their funds.

[aquacharly]

MIKSHA, intindihin mo nang mabuti your lease-purchase or rent-to-own contract.

1st - check who really owns the house/condo unit.
        Baka naman the owner you are dealing with has an existing loan for that house/unit tapos what you pay is applied to that loan.
        Now the danger there is if the owner with the loan does not pay at some time,  the bank moves to foreclose... you have no rights thereto.  As far as the bank is concerned, you are just a tenant.

MIKSHA ,
     There is a wide range of arrangements for rent-to-own or lease-purchase.
      Usually, you come in as a tenant -- and you are given say a year to think it over, whether you want to buy the house/unit. 
     Depends on your contract, your rentals are treated just like that ... rentals consumed, nothing credited.
    Or,  a portion of the rentals are considered as your equity and henceforth your monthly rentals are treated as amortizations.

Read your contract well, very very well.

IMO, if you are not sure about the house's long-term desirability, go rent to own.  But make sure that should you decide you do not want to segue into the lease-purchase agreement -- make sure your contract gives you an easy way out.   

One reason why developers allow rent-to-own arrangements is this --
     if their target clientele are the type who will find it hard to cough up the 10% -15% equity required by banks prior to moving in and using the house/unit ... from their viewpoint, rent-to-own is a better way to go legally.  Meron kasing mga developers they let you in kahit na wala ka pang equity up front di ba.   Basta pay sabay the first 1-3 years the equity and the amortization, okay lang.  Pag na complete mo na your equity, they turn around and have the bank finance it.. so they have cash again to go into other developments.

Now,  some have encountered cases where the buyer is not able to pay up per the amortization and equity build-up schedule.  So eto na.. mas madali mag kick out legally nang tenant kesa nang buyer.  So there, you have this rent to own "animal".  Pagka na complete mo na the required equity, hindi ka na "rent" sampa ka na sa "to own" phase of your contract.

To play safe, whatever they say to paint a rosy picture... basta tandaan mo pag ikaw eh pumalya sa pagbayad per the payment schedule,  you stand to lose all your payments.  Even if you are given a chance to restructure your loan, you will have to pay for penalties for the delay.

[fly_girl333]

rent to own is much more expensive. what you pay mostly goes to interest. that's why rent to own rates usually go from 30k per month and above.

[freelancer_babe]

Rent to own arrangements doesn't require one to loan from bank or PAGIBIG, right? Kumbaga discretion na ng seller/vendor kung papayag siya na pa-rentahan yung place or not?

[red_one]

is there really a "rent to own thing"?  as far as I know, it's just a term, and it is actually like buying a house then apply for a housing loan. Kaya lang sya nasabing rent to own, because of low monthly amortization which is just like paying a rent monthly, and eventually magiging sayo na sya. my opinion lang naman po.

[freelancer_babe]

is there really a "rent to own thing"?  as far as I know, it's just a term, and it is actually like buying a house then apply for a housing loan. Kaya lang sya nasabing rent to own, because of low monthly amortization which is just like paying a rent monthly, and eventually magiging sayo na sya. my opinion lang naman po.

Thanks for your reply.

Konti lang ang nakikita ko online written about this rent to own terms specifically dito sa Pinas. But I happen to stumble on a sample contract of lease na ginagawa sa mga rent to own.

So far, ang alam ko pa lang, rent to own may or may not have downpayments. However, I got this impression na parang di na kailangan ng magloan sa bank or Pagibig. Instead of paying amortizations sa bank or Pagibig, I'm paying to the vendor/seller until I get to own the place - tama ba?

If that is indeed accurate, then this arrangement may be easier for me, kasi self-employed ako at baka di ako maapprove sa housing loan (sa credit card pa lang, pahirapan na).

[freelancer_babe]

pag private individual under the period of 10yrs -15yrs. maximum. and post dated check rin that you will issue for an entire year para wala ka talagang ligtas.   

Thanks sis.

I made further research. Parang talong-talo ang bibili (that is, the buyer) dito. Very risky on the part of the buyer. As in malaking risk to lose 100% of the property that he/she is paying.

If the buyer is not careful, pwedeng may encumbrances yung property. As in pwede pang nakaloan pa sa bank or sa PAGIBIG. If the owner defaults, then evicted na yung mga buyer-tenants.

Or the owner may decide to initially sell it without any encumbrances or loans. As in clean pa. Pero in the middle of the agreement, the owner can just decide to mortgage the property. It will be good kung babayaran ni owner - pero paano kung nadefault siya? Eh di same story, evicted rin ang buyer-tenants.

So in the end, parang trust na lang sa owner ang binibigay dito. Hindi rin protected ng contract yung two risks that I pointed out above.

Unless someone could point out here how to overcome those risks. As I see it now it's 100% loss on the part of the buyer-tenant. In this case, might as well rent na lang to avoid this headache.

[freelancer_babe]

^pwede naman magkaroon ng written agreement ang owner and buyer then have it notarized para
hindi na ibenta sa iba.

No sis. It's not the "selling the property to other that I fear". It's the use of the property by the owner as a collateral (mortgage) for any loans that he wishes to get - usually from banks or pagibig.

[Princess_Chill]

joining....

ang pagkakaintindi ko sa rent to own thing is that you are still buying the property pero instead of having a downpayment in one lumpsum
you will pay it in a installment basis..."this is for the rent to own condo's ah.."

kasi sa real estate kami ni hubby so preselling condo binebenta namin and foreclosed properties...so pag rent to own its sort of buying the property
pero no down payment needed then pag nag bank loan or pag ibig ka na..nagbabayad ka din monthly so its just renting the place na sa iyo na...

im not certain lang for individuals..

sa forclosed properties naman...if they don't have cash naman to shell out ganoon din niloloan din muna nila sa bank then iyong binabayad nila sa bank na montly amortization is parang they are renting narin...

mas safe na ganoon kasi alam mo na hinuhulugan mo ang sarili mo property per se..unless di ka makabayad sa bank ma forclose iyon

[femmenagerie]

Hello Princess_Chill... ok lang if magpa-example computation? I mean in general... Kung interested ako mag rent to own... tapos say nasa 2M kunwari yung price ng unit. I read kasi na parang may downpayment involved?

But since you mentioned walag lump sum... does that mean na yung supposed downpayment will be paid like it was a rent? or parang part of the DP plus rental fees pa? sorry magulo ata yung tanong ko. Hehe.

Wala lang. I've been thinking about getting a condo, but might get married next year eh. So naguguluhan ako magbudget. hindi ko ata kayang magbudget sabay for wedding expensese tapos bili rin condo unit.

Thank you

Post modified. Please refrain from quoting long posts. Use the ^ or @ sign instead.

[quitipierose]

for me mga sis ang understand ko sa rent to own is pang masa,
like me yung kukunin kong house is 2,500 lang per month sa PAG IBIG
so why pa nga me mag rerent? were I can loan naman thru pag ibig,
 

[freelancer_babe]

for me mga sis ang understand ko sa rent to own is pang masa,
like me yung kukunin kong house is 2,500 lang per month sa PAG IBIG
so why pa nga me mag rerent? were I can loan naman thru pag ibig,

Hindi rin pangmasa. Mas mahal pa sa rates ng rent ang mga rent-to-own.

Pero oo, parang mas sigurado pa ang loan sa PAGIBIG o sa bangko na lang.

[Yula]

Naghahanap hanap kami dati ni bf ng ganito dati kasi lahat ng nandito sa manila ang mamahal ng downpayment eh. Wala naman kami ganun kalaking pera na kayang ilabas na one time big time dahil sa kinikita nila per month.

ang rent-to-own kasi para lang yan sa katulad ng mga tao na di kaya maglabas ng cash pang downpayment(kasama kami dun). Kung cocompute oo mas mahal nga eh panu kung di talaga kaya maglabas ng ganun kalaking pang DP. Kaya ayun siguro naimbento itong rent-to-own. 

[meimei]

I'm currently renting a studio. Nanghihinayang na ko sa rent money so i'm considering finding a "rent-to-own" scheme for a 1-bedroom naman.

First time ko to deal with real estate stuff so medyo kinakabahan ako. At nang mabasa ko yung risks ng rent-to-own sa thread na to, napadalawang-isip ako.

Problema, i can't go for direct purchase naman kasi super laki ng DP! Kaso if i continue renting and i'm planning to switch to 1BR, eh ang taas na ng rent ko, 18k/month, nakakahinayang!! Parang amortization payment na...

[quennna]

rent to own own is paying your equity in certain number of months...
its like paying advance and security rent payment..

another thing is renting the place with option to buy property..

[j.adore]

Maybe go for rent to own na developer mismo naghandle vs individual buyer to minimize the risks?

Nung nagresearch ako dati, meron pa din down payment required tapos mataas ang monthly.
Hindi din affordable ang ending para sa amin. We ended up buying at pre selling terms instead.

[nylaner]

  Hi mga sis  .. Kumuha ako ng rent to own house through pag-ibig financing.. And I paid the equity for 12 months.. then The developer will help you loan the rest through PAG-IBIG.. ang loan depende sa salary mo.. sa Pag-ibig kasi maraming terms wether you pay it for 5 years, 10, yrs, 15 yrs, 20 yrs, 25 yrs, or 30 yrs.. syempre kapag  30 yrs mas mababa yung monthly amortization..

[shinta]

I'm looking for a true rent-to-own property sana. Yung tipong magrerent ka ng house or condo, then after a certain number of years, the property will be yours na (of course, under a contract ito). No huge dp, no need for financing (bank, pag-ibig), less documents required.

I tried searching online and asking real estate agents. Usually they use rent-to-own and RFO interchangeably, pero yung process is the regular process of buying a property. Meron akong isang nakita, 3 months dp lang to move in, then pay monthly rent for 10 years and the unit will be yours. Pero itinigil na daw nung developer yung ganung scheme.

I'm really curious kung meron ba talagang ganito and if anyone has availed or was able to own a property through rent-to-own scheme. Pa-share naman mga sis. Thanks!

[jmeangeL]

Parang same naman lahat yan ehh. Rent-to-own lang ang catchy phrase na gamit nila kasi when compared to renting, ehh mas mababa pa ang monthly mo.  Let say sa area na balak mo bilhan ng bahay ay 5k ang rent ng same type na bahay na kukunin mo. Tapos, just a few roads away my development na ang benta ay 6k a month ang monthly for 30 years.  They would call that rent-to-own.

Since, paying for the monthly amortization is almost the same as renting a place.

Now for housing loan with Pag-ibig, bank and in-house, the biggest difference I can say are:
1. Interest
2. MRI: in-house can waive this since they still own the property, it's mandated for banks and paid up front; this is added in your monthly dues for Pag-ibig
3. Cash bond when doing additional improvements or extensions
4. Maximum term to pay
5. Minimum salary to be able to qualify for the loan
6. Equity needed