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Started By
Message
A rent to own question
Posted on 2/4/22 at 12:44 pm
Posted on 2/4/22 at 12:44 pm
I know nothing of rent to own
Looking into getting a portable building to turn into a tiny home on our property for a mildly impaired relative in need.
Found a great company and relative can afford to put down cash payment that is about 60-70%.
The financing only allows terms longer than 36 month but you can pay off at any time ( and relative would pay off in 3-6 months anyway).
Relative insists that the interest on this financing is all calculated up front and added to the balance that is financed.
I thought if you paid off early then you are not paying the interest on the months that occurred after the payoff.
Can anyone provide insight to info?
Looking into getting a portable building to turn into a tiny home on our property for a mildly impaired relative in need.
Found a great company and relative can afford to put down cash payment that is about 60-70%.
The financing only allows terms longer than 36 month but you can pay off at any time ( and relative would pay off in 3-6 months anyway).
Relative insists that the interest on this financing is all calculated up front and added to the balance that is financed.
I thought if you paid off early then you are not paying the interest on the months that occurred after the payoff.
Can anyone provide insight to info?
17
Posted on 2/4/22 at 12:46 pm to GeoSmith
Depends on the terms of the financing…you have to ask them.
Posted on 2/4/22 at 12:47 pm to GeoSmith
Can they save for an additional 3-6 more months and buy it outright
Posted on 2/4/22 at 12:48 pm to GeoSmith
I would consult a lawyer. Do you have any friends who are lawyers that could look at the contract? Or bankers?
Posted on 2/4/22 at 12:51 pm to GeoSmith
Is this one of those Graceland buildings?
Posted on 2/4/22 at 12:51 pm to GeoSmith
quote:
Can anyone provide insight to info?
Without looking at the contract, nobody can.
Posted on 2/4/22 at 12:57 pm to GeoSmith
quote:
I thought if you paid off early then you are not paying the interest on the months that occurred after the payoff.
So it's not interest, it's a finance charge, that is basically added to the terms of the loan.
Let's say you need $10K. Instead of charging you interest, they charge you a $1,000 financing fee.
So you pay back $11,000, and no additional interest is charged.
I can't remember what it's called, but I've seen it before. I had a client once that had a loan from OneMain and it has this.
Posted on 2/4/22 at 12:58 pm to GeoSmith
quote:That's good. The stories I've read (on the O-T, of course) make it seem like it's a terrible idea 100% of the time.
I know nothing of rent to own
Posted on 2/4/22 at 12:59 pm to GeoSmith
They used to call this kind of repayment system the Rule of 78. the linked article explains it pretty well.
What the lender does is figures the total internet for the life of the loan, then front-loads the repayment of interest. If you take the full time to pay off the loan you haven’t paid any more or less interest. However, if you payoff early, you will have overpaid interest at the time of the payoff, and you can’t recoup the overpayment.
This is probably how they structure the deal.
What the lender does is figures the total internet for the life of the loan, then front-loads the repayment of interest. If you take the full time to pay off the loan you haven’t paid any more or less interest. However, if you payoff early, you will have overpaid interest at the time of the payoff, and you can’t recoup the overpayment.
This is probably how they structure the deal.
Posted on 2/4/22 at 1:37 pm to GeoSmith
Assuming this is in LA, you may run into some issues if you do not desire to pass ownership/title until the portable building is paid off. LA traditionally has not recognized the common law concept of conditional sales of movables; rather that ownership/title is immediately transferred to the buyer when the contract is entered. This is not legal advice. And as someone else mentioned, you should consult with a lawyer before doing a deal like this.
Posted on 2/4/22 at 1:38 pm to GeoSmith
rent to own is used shite you pay 3 times the retail cost to buy it new
just go to garage sales and storage locker auctions and you will do better
the only ones happy with rent to own are the iwants who pay those fees with their monthly government allowances so its not their own money being wasted on it
just go to garage sales and storage locker auctions and you will do better
the only ones happy with rent to own are the iwants who pay those fees with their monthly government allowances so its not their own money being wasted on it
Posted on 2/4/22 at 1:48 pm to GeoSmith
quote:
Relative insists that the interest on this financing is all calculated up front and added to the balance that is financed.
wait what.
Posted on 2/4/22 at 2:55 pm to GeoSmith
you've come to the right place.
Posted on 2/4/22 at 3:07 pm to GeoSmith
Building isn't technically yours to build out until paid off. Many people do it but if you were to miss a couple of payments, your RTO agreement provides them access to your property for repo at any time, running the risk of watching your improvements drive right out of your driveway.
Having said that, doing the RTO is likely the way to go as you can get them w zero down as well as no early payoff penalty. Just ask these questions and others when you call. They'll tell you what yiu need to know.
Posted on 2/4/22 at 3:11 pm to keakar
quote:
rent to own is used shite you pay 3 times the retail cost to buy it new
100% wrong. Everyone from Graceland to Derkson to Lelands has RTO under 15K. As do ops like Eagle etc etc for metal buildings.
Posted on 2/4/22 at 4:55 pm to GeoSmith
Can you get a signature loan, or like the other feller said, save for 3 months?
For clarity- somebody will be living in a shed on your back 40?
For clarity- somebody will be living in a shed on your back 40?
Posted on 2/4/22 at 6:32 pm to GeoSmith
Your relative is correct. Rent to own is a giant scam to take advantage of poor people with enormous built in apr...do not do it unless you negotiate the back half to a small fee
This post was edited on 2/4/22 at 6:34 pm
Posted on 2/4/22 at 6:37 pm to GeoSmith
You can't buy a small manufactured cabin and finance the final 30 - 40%?
Posted on 2/4/22 at 6:50 pm to GeoSmith
This sounds fraught with peril in the fine print. Get the form agreement and post and I'll analyze. Just sued some pieces of shite fraudsters on a lease-purchase. They are usually poorly drafted agmts and to the extent they have strong language, it's onerous in favor of seller/lessor.
Posted on 2/4/22 at 6:55 pm to McLemore
Most rent to own companies are backed up by private equity. Bullet proof legally- it's a true shite show industry with what would 100% + APRs and extremely ruthless clawbacks...don't answer the phone on a 30 day late a court cop shows up letting you know they are going to garnish your wage and you pay penalties for them hiring the attorney...turns into 10x cost of what they were buying
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