A Rent-to-Own program, also known as a Lease Purchase program, is a great way to buy a home through non traditional channels. Why would you buy a home under a Rent-to-Own program? For starters, if you’re unable to purchase by traditional means because your credit is not in the best shape, then a lease purchase may be your next option. The current real estate market offers some great deals and now is the time to negotiate a lease purchase that will benefit you. But you don’t want to go into a lease purchase blind.
People who have bad credit and do not have enough savings have difficulty securing a house financing through bank mortgage; thus, it makes it quite impossible for them to purchase their dream home. However, this is only the thing of the past because now it is made possible by rent-to-own deals. Practically anybody, even those who are newly graduates and those who have poor or average credit standing can now avoid the common pitfalls of renting a house for life. What do I mean with this statement? I will try to explain the effects of having to rent as opposed to the many benefits of a rent-to-own homes program.
Edward has just graduated from college. He decided to move to Ottawa from his hometown to explore the possibility of employment. And so on his first year, he rented a condominium where he can stay together with two of his male classmates. At first it was okay because the three of them were sharing in the rental fee. But when one of them moved out because he decided to explore his options in another location, Edward felt the financial crunch. Although he was already earning because he got employed after just a few months of his transfer, filling in for the rent of the one that moved out was a bit of a dent on his cash flow. This was when he learned about the rent-to-own homes program.
Although he will still be paying for a monthly rental fee, he knows that the money will not go to waste because a portion of it, called rent credit, will eventually be applied to his down payment. And besides, he will be paying for the dream house that he will eventually purchase. He knew that after some time he will build a family and he will have to invest in a real estate property where he can raise them. So, this is just making an advanced investment.
He also learned that the price of the property will be pre-set and will not change even if the market dictates so. This makes it very ideal for someone like him who is just starting out his career. He can very well map out his financial obligations even as early as now and as his career progresses with the expected increase in his salary, eventually he can build his equity to pay off for the bank mortgage in the event that he finally purchases the house.