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 home in Spain 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 large cities such as 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 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 rental with the right to purchase 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 home. In this way, when the time comes to buy it, its lower price, 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 be reduced, the financing necessary to acquire the property will be less. In a situation in which a person has a rent with the right to buy a house of 200,000 euros, if they allocate 300 euros of their rental fee to reduce the final price of the property for four years, they finally get a loan for a house of 185,600 euros, about 14,400 euros less than if he had purchased the property four years earlier.
In this way, taking into account that the user would request a mortgage with 80% financing, if the price of the house is 185,600 euros, they will have to contribute 55,680 euros (30% of the amount), while for a loan of 200,000 euros a necessary 60,000 euros. This means that the future owner will save a total of 4,320 euros.
Does rent-to-purchase have drawbacks?
However, it has its downside. 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 take into account is that when the end of the term stipulated in the contract arrives, 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 a breach of the contract, therefore, they will lose the money that they have been contributing and 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 about whether, when the rental period ends, 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.