For most people, buying a home is the biggest and most important purchase they make in their entire lives. It takes commitment, responsibility, and a lot of money. In order to pay for these homes, home buyers usually need to attain a mortgage. Getting approval for a mortgage may not be that easy if you have bad credit or had negative financial situations in the past. Lenders will often want some sort of assurance that the money they are leaning towards a mortgage will be paid back with no default. This assurance comes in the form of good credit and reputable financial records. For those that find themselves in a poor credit situation, all hope is not lost. Rent to own homes programs with reputable companies is a way for people with bad credit to be able to finally own a home of their own.
Rent to Own Homes Contracts Explained
How exactly do rent to own home contracts work? Basically, a potential rent to own home buyer would pay a “rent”, but part of that monthly payment actually goes toward the equity or down payment of the home. In addition, making payments on time every month helps to establish good credit. The contract will have a pre-determined length of time in duration, with an agreed upon price for the home. If the home buyer adheres to the terms and conditions of the contract, they have the option to buy the house at the pre-determined price at the end of the rent to own homes contract.
The price the rent to own home buyer pays is not affected by any fluctuations in the real estate market. The price of the home is pre-determined and written into the contract. Even if the value of the home goes up by the end of the contract, the rent to own home buyer would only be obligated to pay the agreed upon price as stipulated in the contract.
Rent to own home buyers need to maintain their end of the bargain in order to remain qualified to purchase the home at the end of the rent to own homes in Toronto contract. First and foremost, the monthly payments must be made on time and in full each and every month. Any default in these payments would not be viewed favourably. These payments may be a bit more than the average rent, but it is important to keep in mind that part of these monthly payments is put towards the purchase of the home. This becomes somewhat of a forced savings program that ensures money is put towards the house on a regular basis.
In addition, proper care of the home is necessary. Any minor repairs should be dealt with by the rent to own home buyer, and no major alterations to the home should be made without consent.
Benefits to Rent to Own Contracts
The advantages to a Toronto rent to own homes are quite obvious. Those with bad credit are able to buy a home in Ontario that they may not have otherwise been able to do. Those who are unable to gather a large sum of money to put towards a down payment also have the advantage of a rent to own contract, since the down payment is slowly accumulated through portions of the monthly “rent” payments and 5% or so down.
Durham Region real estate continues to be a good investment and a source of financial security for many households. With all the diverse areas available — from the Pickering to Newcastle, there is no shortage of great neighbourhoods. Whether you are looking for a freehold townhouse or a detached house, Durham Region is the city more Canadians call home than any other. Rent to own is a great way to enter the real estate market before prices go up further. These rent to own homes contracts give people the opportunity to build equity in the home, and at the same time build up good credit and repair financial problems. These rent to own homes contracts give people the opportunity to build equity in the home, and at the same time build up good credit and repair financial problems.