What are the differences between owner financing and rent with the option to buy?
May 20th, 2010 | 
Author: we have a chance to purchase a house with owner financing but are being told that we have to notify them of any major improvements on the property….that sounds more like renting with the option to buy to me….can you please clarify the laws pertaining to this?
Posted in 
Tags:
they are about the same but I can understand why he wants to be told of renovations as many start out doing well but most never complete a owner financing plan. If you do this then do it for a couple of years at most then get bank financing through Fannie or FHA and they will do this as a refinance and always pay on time and by CHECK ONLY as you will need proof of timely payments an a landlords word is not good enough
The two concepts are quite different.
Owner financing is when the vendor (seller) gives you the mortgage instead of the bank. You pay the seller your monthly payments, not the bank. The seller has the same rights as the bank in the event of default–demand letters, judgments, foreclosure, etc.
An option is just the first chance to buy something. If I had a car, for example, that you wanted to buy but I didn’t want to sell just yet, I might sell you an option. That is to say, when I do decide to sell the car you have the first opportunity to do so before I advertise it.
Simple; owner financing is simply the owner holds the mortgage, you pay the mortgage payments as if the owner is a regular bank.You have a title or a deed to the property the property is yours.
A bank never tells you what you can do to a property as long as it is an improvement.
Option to buy you typically rent, and a portion of your rent goes toward a down payment on the house.
Get a good interest rate, watch the bank rates to day.
Good luck.