For many Canadians, moving from renting to owning a home is a sign that they have entered the adult world. Quite a few people have used rent to own programs in the Niagara Region to leave leases behind and start amassing home equity.
HOS Financial helps many clients in the Niagara Region enter into rent to own Programs, and, if they are currently a home owner but have run into some financial difficulty we help families avoid Power of Sale or Foreclosure.
For most Canadians, the path to financial security involves buying a home and owning it free and clear or selling it at a gain. For many, though, this path is beyond their reach because they lack the credit score or the down payment to gain mortgage financing from their bank, so they keep on renting. This cycle of moving from one lease to the next often traps people for their entire adult lives.
What is “rent to own”?
Buying a house with a rent to own agreement works a lot like a typical lease. You make payments every month, but in a Rent to Own program, the difference is that some of your rent is set aside to a savings account every month.
At the end of the Rent to Own Tern, the money set aside each month accumulates to become your down payment at the end of the Rent to Own program. So if you’ve had a hard time setting aside money for a down payment in your own budgeting process, a Rent to Own program can help you can migrate from renting to owning.
Rent to own Niagara region programs allow you to move toward home ownership, not just by helping you accrue a down payment but also by giving you time to resolve your credit issues while you are already in the house you want to buy. This way you are not having to save up for another costly move, and you have the motivational factor of already residing in the first place you will own.
This “agreement” actually consists of two distinct documents: the Option to Purchase and the lease agreement. You have to sign both of these contracts between yourself and an Investor before you can start a Rent to Own program. The Option to Purchase will show, between now and a set date in the future, you have the option to purchase the home for an agreed price. Yes… with HOS Financial’s Rent to Own program, the future purchase is determined at the end of the Rent to Own program.
The lease agreement is a fairly standard lease much like what you would sign for an apartment or a rental home, but it also indicates how much of the rent is going toward your down payment and all other financial details like the future Purchase price.
It is important to remember that these are legal documents. So before you turn in the documents with your signature, you take your rent to own agreement for the Niagara Region to your lawyer for Independent Legal Advice. Your Lawyer will go over the paperwork and make sure that everything is in order.
Rent to own vs Lease to own
These terms are fairly interchangeable, but you always want to review rent to own agreements with your lawyer to ensure that you are not signing something that contains errors or will infringe your rights. While you’re in the rent to own program, you will be given time to build up your credit so that, when the rent ow own tern ends, you can qualify for a Bank Mortgage to complete the purchase of the home.
What about the option to purchase?
This is the most important element in the process. This should contain the agreed to future purchase price and the date on which you must complete the purchase. Having this option is what motivates people to enter rent to own programs in the Niagara region.
If you have the income to afford a mortgage payment but your credit history is spotty and/or your income history is not that regular, rent to own programs in the Niagara Region give you another way to own a home.