1. What is Rent-to-Own?

Rent-to-own (also called lease-to-own) is an agreement where you rent a property with the option to buy it at the end of the lease term. Part of your monthly payment may go toward the eventual purchase price.

2. How Does the Calculator Work?

The calculator uses the rent-to-own payment formula:

Where:

• \( Purchase\ Price \) — Agreed future purchase price of the home
• \( r \) — Monthly interest rate (decimal)
• \( n \) — Number of months in the agreement

Explanation: This formula calculates the fixed monthly payment needed to pay off the purchase price over the term at the given interest rate.

3. Importance of Payment Calculation

Details: Understanding your potential monthly payment helps you evaluate whether a rent-to-own agreement fits your budget and financial goals.

4. Using the Calculator

Tips: Enter the agreed purchase price in USD, monthly interest rate as a decimal (e.g., 0.01 for 1%), and the number of months in the agreement.

5. Frequently Asked Questions (FAQ)

Q1: What's typical for rent-to-own terms in NC?
A: Agreements typically run 1-3 years with 1-5% of the purchase price as an upfront option fee.

Q2: How is the interest rate determined?
A: Rates vary but are often higher than traditional mortgages to account for the seller's risk.

Q3: What happens if I don't buy at the end?
A: You typically lose any option money and rent credits, unless the agreement specifies otherwise.

Q4: Are there additional costs?
A: You may be responsible for maintenance, repairs, and property taxes during the rental period.

Q5: Should I get legal advice?
A: Yes, rent-to-own contracts can be complex. Consult a real estate attorney before signing.