Are you tired of paying rent and exhausted from dealing with inflexible banks? Well you are not alone.Banks and traditional lenders are tightening their belts when approving mortgage applications. This means many good incomes are faced with circumstances that make it next to impossible to receive conventional bank financing if…
- · They lack an established credit history
- · They have poor credit
- · They are self-employed with less than 2 years of company history
- · They have credit challenges due to job loss, health issues, divorce or bankruptcy
- · They are in consumer proposal
- · Lenders and CMHC require higher down payment
These types of people are finding it very difficult to buy a home despite having the necessary 5% down payment. These people should consider a rent to own program!
There are different variations of rent to own, however, one recent program is quite interesting in that it allows you to choose the home you love, in an area you desire, at a price you can afford.
A desired lease period is then determined to give you the time you need to correct the issues that are keeping you from getting financing from traditional lenders. Whether you need to repair your credit, or amass a more sufficient down payment, all of this is done without wasting another dime on rent.
For this example we are using a home to be purchased for $200,000 with a 2 yr lease.
Category The lowdown More Lowdown
Rental term 2 years typically between 1 to 3
Initial Down Payment 5% of $200,000 $10,000
End of Lease Purchase Price 5% increase/year $220,500
(Subject to change)
Monthly Lease $1,360
Monthly Option Credit Goes to Final Down Payment $340
Total Monthly payment $1360 + $340 $1,700 + utilities
Down payment saved (2yrs) $340 x 24 months $8,160
Total Down payment available $10,000 + $8,160 $18,160
Amount to Purchase $220,500-$18,160 $202,340 (at end of the lease term)
So if you want to Move now perhaps this program will work for you, talk to your Mortgage Broker or Realtor about this program.