Rent To Own Homes In Maryland

Maryland Rent To Own

Rent to own in Maryland is an agreement in which you rent a home for few years initially and opt to buy the home later before the lease expires.

You commit to rent a property for a certain period of time, take the responsibility of maintaining it and plan to buy at a later time as agreed in the contract. You can find rent to own homes Maryland with good liveability, ease of access, low crime rate and exotic places to explore.

Rent to buy is not a fit for all program and it has its own advantages and disadvantages. The following section provides a brief overview of how rent to own program work, its advantages and disadvantages. It also explains for whom this program is best suitable.

How does the rent to own programs work in Maryland?

Rent to own home programs in Maryland is an alternative to traditional mortgage to buy a home. Before you choose a rent to own program, you need to understand its terms, conditions, pros and cons and how it works.

The real estate company works with you to find the best matching house you like and then buy it outright. You sign a traditional lease agreement and pay rent to the company for a certain period. You can start living in your home for a certain period. At the end of the contract period, you can opt to buy your home or move to a new home, depending on the type of contract.

  • Non-refundable upfront fees.

You need to pay non-refundable upfront fees called as option fee, to the company or the seller. This is a negotiable fee which gives you the option to buy the house in the future. It usually ranges between 2.5 % and 7% of the purchase price of the home.

  • Types of rent to own contract.

Rent to own contract can be of two types, lease option and lease purchase. When you choose the lease option contract, it gives you the right to buy the home when the lease expires. You are not obligated to buy the home under a lease option. You can decide not to buy the home at the end of the lease and move to a new home. you are not obligated to continue to pay the rent as well.

Under a lease-purchase contract, you are legally obligated to buy the home at the end of the lease period. You need to buy the home irrespective of whether you can afford it or not.

  • Purchase price.

Rent to own agreement may specify the purchase price of the home when the contract is signed. The purchase price is usually higher than the current market value. The purchase price may be determined after the lease expires. Most buyers prefer to lock in the purchase price when they expect home prices to trend up in the future.

  • Rent payments.

As part of the agreement, you pay higher rent than the current rent in the area. A percentage of this payment is set aside as a credit for your future purchase of the home. Few contracts have the option money is applied to the eventual purchase price at the end of the lease.

  • Home maintenance.

Depending on the terms and conditions of the rent to own agreement, you may be responsible to maintain the property and pay for repairs. Though it is the responsibility of the seller to maintain, it may be included in the contract which you need to read carefully. You may need to get renter’s insurance policy to cover the loss to personal property or an injury while at home.

For whom is the rent to own program suitable?

Rent to own is suitable for people who have bad credit scores. It is also suitable for people who do not have enough money saved for a down payment to buy a home.

When lenders refuse a mortgage loan that is large enough to buy a home, rent to own program is the alternate choice. With rent to own program, you can get the home you want to buy immediately without a loan.

It is also suitable for people who want to rent a house initially and plan to buy at a later stage after saving a lump sum amount. It also gives an option to check the liveability of the house and its neighborhood nuisances before buying.

What are the advantages and disadvantages of rent to own a program in Maryland?

Rent to own programs has its own pros and cons which you need to understand before you buy.


  • Build your down payment.

When you pay a high monthly rental to the seller, a part of the amount is used to build a downpayment for you. You need not make a large lump sum downpayment initially under this program.

  • No buyer competition.

At the end of the lease period in rent to own, you need not face any competition from other buyers. You can negotiate the price if there are any issues in quality or basic amenities.

  • iii. Lock in the purchase price.

You can negotiate and lock the purchase price of the house in the contract. This is highly beneficial when the market shows an increasing trend in home prices.

  • No need for high credit scores.

Rent to own programs allows you to buy your dream home even with bad credit. When you do not qualify for a home loan, you can opt rent to own program and rebuild your credit score over a period of time.

  • Test liveability and neighborhood.

You can move into your new home immediately and check the conditions of liveability before you buy it. you can also find challenges in the neighborhood, ease of access and safety that was not revealed to you by the seller.


  • High monthly rent.

High monthly rents with a rent to own program than the market price. These large payments get forfeited when you do not buy the home at the end of the lease period.

  • Non-refundable option fee.

The initial option fee is nonrefundable and you may lose much cash if you do not buy the home or if the deal does not go through for any reason.

  • Pay for repairs and maintenance.

Most rent to own contracts requires you to pay for all repairs and maintenance. Though you need to pay this amount for a house that is not yet yours, you can negotiate with the seller.

  • High risk for the buyer

You are at greater risk when you default monthly payment. You may lose the right to purchase and in some cases, you will lose the extra payments you made with high rents paid.

How to buy the property with rent to own program in Maryland.

When the contract ends what happens depends upon the type of contract you sign in. You may decide to buy the property or not to buy it.

If you have a lease option contract and want to buy the property, you need to apply for a mortgage loan to pay the seller in full amount.

If you decide not to buy the house or fail to secure any mortgage loan, the option expires and you move to a new home. You will forfeit the option fee and extra amount you paid till the end of the lease period.

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