I’ve started working with a great company in Ottawa who, along with my team, helps clients get set up in the home of their choice, on a rent-to-own basis. Here’s a quick overview of how the program works:
– client puts down a small down payment (2% – 3% usually)
– the future purchase price of the home (which was chosen by the client) is set out in the lease contract at the outset (so you know what you will be paying for this property when you are ready to roll on your own)
– the rent-to-own company holds the title and gets approved for the mortgage on the property
– the client is responsible for all utilities (up to $350/mo) and the rent-to-own company pays the home owner insurance and property taxes
– the rental/lease amount paid monthly is comprised of the preset rent plus part which is set aside towards the client’s down payment for when they are ready to buy the house from the company
– we work with the rent-to-own company to ensure the term for the lease is suitable to the time my team will need to help the client re-establish their credit (as applicable) or the timeframe in which we have determined that the clients’ circumstances will then allow them to be approved for a mortgage
– client moves in on closing and starts their journey to homeownership!
The company I’ve aligned with has been around for many years – so they know their stuff. At present, we are working on a deal for a client who wouldn’t otherwise be able to qualify on their own due to a marriage breakup and not enough down payment. They can well afford the property, but because of the marriage breakdown, their credit has taken a serious hit, so we need some time to work on repairing it. They have little to put down and this will allow them to keep their kids in the neighbourhood of their choice and in a home that suits their needs – all the while saving towards the down payment, building up some equity (as the property is likely to increase in value past the preset purchase price for when they are ready to buy it themselves), and not paying rent on a property they will never own.
Just another option to help people become homeowners sooner!