Rent to own in Ontario is a creative way to get the house of your dreams and is a great alternative for home purchasing. Rent to own is a win-win opportunity for all the participants.
How to rent to own a house in Ontario
Owning a home is the primary way of most Canadians for building wealth and securing their future. However, many people are not able to realize this dream and end-up paying someone else’s mortgage in the form of rent. Often, consumers lack the financial education needed for purchasing a home. Thus, they are unable to get past the obstacles, and are deprived of buying a home and attain the wealth they desire.
What rent to own means?
When you buy your home under a rent to own purchase program, you pay a monthly rent, and a part of this rent is credited as the down payment for your house purchase when you buy the home at some point in the future. This is a simple concept which allows you to own the house you desire, despite having a poor credit rating, or insufficient money for down payment. In a Rent to Own Program in Ontario, you get the opportunity to accumulate your down payment while you live in the house you desire to own. Rent to own a home in Ontario program is designed as a proactive step which allows you to have a home despite hurdles you may face from a Bank, from having Bad Credit or lack of Down Payment.
Rent to own agreements required in Ontario
In a rent to own program, there are two agreements between you, the buyer or tenant, and the landlord. These two agreements are known as the rent to own “option to purchase” and the rent to own “lease agreement”. Therefore, when you decide to take a home under a rent to own program, you will have to sign both contracts before you can get the keys of your home. Ethical Rent to Own companies require their tenants to receive Independent Legal Advice and review the contracts with their lawyer.
Lease To Own Homes in Ontario – Ontario lease agreement
Each rent to own program has fixed a term during which you will be leasing the home from the rent to own company or the rent to own landlord. This pre-determined time-period is known as the lease term.
Usually, the lease term of rent to own program is between 3 an 5 years depending upon your need and your financial condition. In most cases, this lease term is 3 years usually giving the Rent to Own company an ample time-period for consumers to repair their credit rating and simultaneously accumulate a down payment that is sufficient when you secure traditional bank financing in the future.
The rent to own lease agreement will have the details like the amount of rent you will have to pay each month and the date on which your lease period will end. This agreement will also specify the date when you will be legally entitled to take possession of the home.
Additionally, the lease agreement for your rent to own program will outline certain other details like the rent payment due dates, who is responsible for utilities, and the methods of making the payment.
The option to purchase agreement in Ontario
The most important benefit of a rent to own program in Ontario is that it gives you the power to avail the option of purchasing the home you rented either during the lease term or when the lease term has ended. Therefore, when signing a rent to own agreement in Ontario you are required to sign the option to purchase agreement.
The option to purchase agreement signed between you and the landlord gives you the power to buy the home from your landlord. This agreement will legally obligate your landlord to sell the house to you, if and when you decide to avail this option.
This agreement will also specify other details like the final purchase price of the home, the duration for which the option to purchase the home will be available to you, the amount of monthly payment that will be deducted as your down payment, and how much will be the house’s down payment.
Availing the option of rent to own homes in Ontario is the best way to purchase a home if you don’t have the funds to buy a house or have poor credit rating. This program is a simple concept, but you must have a proper understanding of the type of rent to own agreements necessary in Ontario that you would have to sign when availing this program. The information given above will surely help you in taking full advantage of this amazing program and become a proud home owner now and in the future.