People are always keen to buy their own homes, and it sometimes remains just a dream for them, because of not having enough saving to make the necessary down payment, a poor credit rating that keeps interest rates high or their choice of home being too expensive for a mortgage. Now however, the idea of rent to own homes is promising prospective home owners in Canada a means to move into their own houses.
The idea of rent to own homes is fairly simple. You pay a monthly rent for the house you have selected as the one you want to own. A part of this goes towards the actual rent, whereas another portion is kept aside for making a down payment for the home. So this saves you the trouble of waiting till you have saved enough money for that elusive down payment. With the way the real estate market keeps going up, this can also mean a substantial saving, as you would decide on the down payment at the rates prevailing today. A few years down the line when you will have saved enough for the down payment for a normal purchase, the value of the home and hence the down payment would have increased correspondingly.
Rent to own homes are available that will have clauses in the agreement that allow you to change your mind, in case you decide the home is not the right one for you, or when circumstances force you to consider relocating to another city. There is a downside however, and you would lose the amount that has been set aside for the down payment. Sufficient notice would have to be given to the real estate agents and the owner if you do decide you want to opt out of the deal.
It is required to make a down payment limited to seven and a half percent of any purchase price decided on, but this is much less than the amount required in a conventional home deal. A minimum of $15,000 is also expected for any rent your home deal. This amount is credited towards the down payment. Some properties do require lesser amounts but this would depend on the owner and the real estate agent.
Once the down payment amount has reached the required figure from the sums paid as rent, the process of buying out the lease with your own mortgage or other funds can be initiated. Rent to own homes may cost about thirty percent more than conventional rents but will actually depend on the period of the rent-to-own agreement and the rent figure agreed on at the start of the agreement.
Do not be in a hurry to enter into any rent-to-home agreement. Make sure that the property in question is one that really suits all the needs of you and your family and is in a neighborhood that you are comfortable with. It is best to be in touch with a company that has sufficient experience in the rent-to-home field, as then you would be properly guided into the agreements that you would have to commit to.