Rent to Own in Hamilton How Does It Work?
Buying a home in a Rent to Own program means that a part of your monthly rent is credited towards a future down payment on the home you live in. Based on this simple concept, people with poor credit ratings or simply without the cash to make a down payment can own their homes. Through Rent to Own, Hamilton would-be homeowners can accumulate the necessary down payment and improve their credit while living in the houses they want.
Rent to Own allows you to overcome the hurdles of poor credit or insufficient cash on hand, and buy the home of your dreams.
History / Statistics:
With a booming steel industry and the third largest population of immigrants in Canada, Hamilton is a very popular place to live. (Its population of just under 520,000 makes it the 10th largest municipality in Canada.)
Even better, Hamilton has been ranked as the fifth best place to invest in real estate in Ontario, and housing prices have been slowly but steadily moving up. The city is the centre of Ontario’s manufacturing “golden horseshoe,” and all estimates suggest the city will only increase in attractiveness in the years to come.
At the same time, economic prosperity and rising housing prices mean that not everyone is able to purchase the home they want. The sub-prime mortgage crisis left lenders reluctant to make loans to those with sub-par credit ratings, while the lenders which once made such loans are in many cases no longer doing business in Canada. This leaves many would-be homeowners in a difficult position.
- Would you like to buy a home in Hamilton but your credit is standing in the way?
- Have you been refused bank financing to buy a home in Hamilton?
- Have you thought about Rent to Own?
Rent to Own Agreements in Hamilton
Rent to own programs require two separate agreements between the buyer / tenant and the landlord — the “lease agreement” and the Rent to Own “option to purchase.” An ethical Rent to Own company will require you to look over both contracts with your attorney before you sign. Once you sign the agreements, you get the keys to your home and can start living there.
Rent To Own Lease Agreement
Rent to Own programs always have a pre-determined lease term, which is the length of time you’ll lease the home from the landlord or Rent to Own company. Normally, this period is 3-5 years, though it can vary based on your individual needs and financial condition.
Mostly, this lease period lasts 3 years. This way, the Rent to Own company has plenty of time to help you repair any credit issues you may have, and you as the homeowner-to-be can accumulate enough of a down payment to secure regular bank financing when the lease term ends.
A Rent to Own Hamilton lease agreement covers details like the amount of rent required each month as well as the date your lease period ends. It also specifies when you’ll be legally entitled to purchase the home.
Lastly, like any lease agreement, the Rent to Own lease will cover questions such as when rent is due, whether you or the landlord will pay the utility bill, and how to make payment.
The Rent to Own Option-to-Purchase agreement
The key element which differentiates a Rent to Own program from ordinary rental is the ability you have to purchase the home during the lease period or at the end of the lease term. This is why, with Rent to Own in Hamilton, you must also sign the agreement which gives you an “option to purchase.”
This agreement is the legal document which gives you the ability to buy the home at the end of the term. It legally obligates the landlord to sell you the house, if you decide to exercise this option within a given time period.
Generally, Option to Purchase agreements also specify the agreed-upon purchase price, the time period when the option to purchase exists, how much of your monthly rent will go towards the down payment, and what the down payment will be.