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Brampton, ON

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 Rent To Own Information

Ren to own what you need to know.Complimnts of Edison and Arlene Samuel Brampton and Mississauga Real Estate Agents

 
 
How Rent To Own Works(**)
 

The biggest drawback to renters buying a home is finding the down payment and having below average credit. The current down payment required on a principal residence is now 5% of the purchase price with average credit. You may have heard about rent to own programs, but before you sign a contract, learn about the details of such a program and have a real estate lawyer review the contract before signing it.

What rent to own means:

 

Who needs a rent to own property:

If you would like to buy a home,and your credit score is below average, you don't have the required down payment and you have a steady job, a rent to own property may be an option. This option gives you time to increase your credit score and save for the down payment

The contents of the rent to own contract: (Only a sample)

  1. A contract for a specific period of time must be signed
  2. A deposit is required could be any amount depending on the price of the home and the seller 
  3. A certain portion of your rent goes towards the down payment
  4. What happens if your default on the monthly rent
  5. Who is responsible for maintenance of the property
  6. There must a stipulated purchased price that you will pay for the home at the end of the term
  7. What happens to the deposit and the extra payments if you change your mind and not buy the property.
  8. Can the contract be cancelled at anytime by both parties?
  9. Are there any penalties for terminating the contract before the contract end date.
  10. What happens if the seller cannot pay the mortgage and the home is foreclose
  11. What happens if you are unable to get a mortgage at the end of the term of the contract

 

How much of your rent goes towards the down payment:

You have to examine your budget to determine how much extra rent you can afford. The larger your rent and the longer time you make them for, the larger the accumulated down payment you will have. When your rent-to-own contract ends the total extra rent and your initial deposit will be totaled as your down payment on the purchase of the home. 

Is rent to own a Good or Bad option?

Rent to own can be both be an advantage and disadvantage, you must ask the following questions:

  1. Are their any other available programs in the market that is better than rent to own
  2. Will the projected mortgage rates be lower or higher at the end of the term of the contract
  3. Are you certain you would be able to get a mortgage to buy the home at the end of the contract.
  4. What happens to the down payment and the deposit if you change your mind during the term of the contract

 

**Disclaimer: Please be advised that information herein is not to be taken as the complete information on RENT TO OWN properties, before signing any contract seek legal advice.

 

If you are thinking about buying a home and would like to learn more about the Home Buying Process, please contact us by filling out the form below.



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Dir: 416-258-3079,
Office: 905-456-1177  

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