Lease to own houses are a great way to get into a home in New Jersey if you have a bad credit or no credit. You can find New Jersey rent to own homes on the internet, in the newspaper or on TV. The concept is simple: you lease a house that is owned by someone else and then purchase it at some point in the future.
There are two types of lease-to-own arrangements in New Jersey:
Lease Purchase – In this type of arrangement, you pay rent for the property and get the option to buy it at any time during the rental period for a predetermined price. This price will usually be equal to or greater than what you would pay if you put down a traditional 20% down payment on an equivalent property. The advantage of this type of arrangement is that it allows you to move into your own home without having to come up with thousands of dollars for a down payment.
Land Contract – A land contract works like any other type of loan. However, instead of paying off the entire loan at once, you make payments over time until it’s paid off. Land contracts usually have lower interest rates than other types of loans, but they also may have higher monthly payments because they are paid back over time instead of all at once like most other loans . The advantage of a land contract is that it allows you to move into a home before you have saved enough money for a down payment. .
The drawback of a land contract is that if you decide to sell your home before the land contract is paid off, the lender can come after you for any money still owed on the loan. For this reason, many people choose not to get involved in this type of arrangement.
If you are considering a land contract, make sure you talk to an attorney first. The lender will require that you have proof of income and good credit in order to qualify for the loan.