what it is, how it works and the fine print
Accessing a home is a more complicated process than ever, since prices do not stop rising. According to the latest data from Fotocasa, the average price of a housing in Spain It was 169,040 euros in the month of April, which is 10% more than in the same month of 2022.
In addition, it must be taken into account that in the big cities like Madrid and Barcelona the price is higher. In the capital, for example, the average price stood at 448,710 euros.
Faced with this situation… what options Are there for those people who want to buy a home? There are several ways that can be used to get to buy a home. One of them is the rent with the right to buy. What does it consist of?
A rent to buy It consists of the user entering a home in the rental modality and, once a certain period has passed, buying the property, therefore, the tenant becomes the owner.
What are the advantages of living for rent and then being able to buy?
One of the main advantages of this modality is that part of the money earmarked for rent is used to reduce the final price of the house. In this way, when the time comes to buy it, its price will be lower, therefore, the tenant will not be affected by the price increase that takes place during that period.
On the other hand, as the price of housing will decrease, the financing necessary to acquire the property will be lower. In a situation in which a person has a rent with the right to buy a house of 200,000 euros, if he allocates 300 euros of his rental fee to reduce the final price of the property for four years, he will finally need a loan for a house of 185,600 euros, about 14,400 euros less than if he had acquired the property four years earlier.
In this way, taking into account that the user would request a mortgage with a 80% financing, if the price of the house is 185,600 euros, you will have to contribute 55,680 euros (30% of the amount), while for a loan of 200,000, 60,000 euros were necessary. This means that the future owner will save a total of 4,320 euros.
Does rent-to-purchase have drawbacks?
However, it has its negative part. As part of the rental money is used to reduce the price of the property, the monthly fee is usually much higher than that of a regular rental.
Another point to note is that when the end of the stipulated period arrives In the contract, the future owner must have the money to be able to face the purchase. In other words, he must have financing from a bank to be able to carry out the operation.
In the event that the user does not have the necessary money, it will be considered breach of contractTherefore, you will lose the money you have contributed and you will probably have to leave the house.
Like any modality that allows a person to have a home, it has its strong points and its negative aspects. Therefore, the most important thing in this case is to think if when end of term rental, the user will have the necessary financing to buy the home.
Experts recommend going to a mortgage comparator, such as iAhorro, to calculate if there is a possibility of paying off the remaining mortgage and looking for the best on the market to dispose of that money and not run out of the house.