Rent-to-own strategy in 80s and 90s used by cash strapped individuals and families and which was not very much recognized or anticipated in Real Estate world that time is said to coming back again but this time with better recognition and is gaining popularity, says one report.
What could be the reasons for this come back?
Is it because obtaining a mortgage is difficult now a days than before?
Interest rates being at the lowest for last few years, the difficulty in obtaining a mortgage could be due to tightening of lending policies and / or lowered family income, or they are new to Canada. There could be some other reasons to this. Few of the reasons cited in the report are:
- qualify at the bank for a mortgage but have been turned down by CMHC;
- have a house up for sale and want to buy another one but can't qualify for two mortgages at the same time;
- are new to Canada and do not have established Canadian credit;
- recently started a new job so have not established and employment track record that satisfies the bank;
- are self-employed and therefore have a tougher time proving income to the bank; or
- have gone through a divorce and are now rebuilding credit and equity.
So, in short, is rent-to-own could be one of more favored strategy of owning the house considering the difficulties in obtaining a mortgage?
Well, this is for further debate and discussion.