| Consumers are pretty familiar with the rent-to-own | | | | lease-to-own also fixes the future purchase price of |
| concept. The strategy offers a way for people to rent | | | | the home. This is done with the help of an accredited |
| or lease things that they can't afford to buy outright. | | | | Ontario mortgage professional when they approve a |
| The idea of giving people the use of something today | | | | tenant for a LTO home, as well a licensed realtor once |
| without having to actually buy it first is the same | | | | the tenant finds the house they want to eventually buy. |
| concept behind lease-to-own (LTO) homes. | | | | Before deciding what the final purchase price will be, |
| A Canadian lease-to-own home offers some distinct | | | | the tenant's current household income, outstanding |
| advantages that make it a wise strategy for someone | | | | debts, what they can reasonably afford to buy, and |
| who is unable to qualify for a mortgage today. We | | | | historical appreciation in the chosen neighborhood have |
| describe five of these advantages below. | | | | already been considered. Agreeing to the price in |
| Saving a Down Payment | | | | advance gives a tenant the peace of mind that their |
| The goal of a lease-to-own home is to give a qualified | | | | deposit will be enough to buy the home regardless of |
| tenant the tools to buy a home sooner. A tenant | | | | what its actual value is. |
| leases a home they want to eventually own for a | | | | Build Instant Equity |
| specific period of time in order to do two things - build | | | | Once a tenant is approved for a LTO home they are |
| a down payment and fix their credit. | | | | required to make a non-refundable security deposit - |
| In Canada a potential home buyer currently needs a | | | | currently 2-3% of the approved purchase price. This |
| down payment of at least 5% plus closing costs in | | | | deposit is eventually counted towards the final down |
| order to qualify for a mortgage and CMHC (Canadian | | | | payment giving the tenant equity in the home from the |
| Mortgage and Housing Corporation) insurance. The first | | | | day they make their deposit. |
| advantage of a lease-to-own home is that it acts like | | | | A tenant isn't limited to the equity created by their |
| a forced savings plan because a fixed amount of the | | | | down payment though. Most home owners will usually |
| lease payment is set aside each month. A typical | | | | make some type of upgrade to their home, whether it |
| Canadian LTO helps a tenant save enough money by | | | | is a deck in the backyard or new cabinets in the |
| the end of the lease term to qualify for a CMHC | | | | kitchen. |
| insured mortgage. | | | | The same is often true in a lease-to-own because a |
| Repairing Personal Credit | | | | tenant doesn't have to wait until they're able to buy the |
| The other half of the lease-to-own picture involves | | | | home to start making improvements to it. With the |
| helping a tenant repair their credit. Sometimes a tenant | | | | owner's approval they can make upgrades that will |
| is able to do this by simply making their monthly lease | | | | usually increase the value of the home and create |
| payments on time. Other times they may need to | | | | additional equity for themselves when they buy the |
| work closely with a credit counsellor to rebuild their | | | | house. |
| credit score or reduce their existing debts throughout | | | | A tenant that's unable to qualify for a mortgage today |
| the LTO term. | | | | can use a lease-to-own to buy a home in as little as |
| The combination of a good credit score, low debts, | | | | 24 or 36 months. This strategy helps tenants save a |
| and a reasonable down payment will help the tenant in | | | | down payment and repair their credit. Fixed lease |
| getting the banks to say yes when they apply for a | | | | payments and a guaranteed purchase price provide |
| mortgage. They will have also gained an education in | | | | them with cost certainty. The fifth and perhaps the |
| financial management while making themselves more | | | | most appealing advantage for tenants is the ability to |
| attractive to lenders in the future. | | | | increase the value of their home before actually |
| Fixed Lease Payments | | | | owning it and possibly reducing their CMHC insurance |
| The third advantage of a lease-to-own home is that | | | | premium in the process. So it is possible to have your |
| monthly lease payments are fixed for the full term of | | | | cake and eat it too! |
| the lease. A normal rental agreement in Ontario allows | | | | David-Paul Sip is a successful Canadian real estate |
| the landlord to increase rents by a certain amount | | | | investor from Toronto, Ontario. He is the founde |
| once every 12 months. | | | | Now Pay Close Attention -- |
| This isn't done with a lease-to-own agreement | | | | Do you have an Ugly house you want to sell? On the |
| because increasing the monthly payments by any | | | | next page you will find someone who will put cash into |
| amount could affect its affordability for the tenant. A | | | | your pocket for that broken down wreck of a house. |
| fixed monthly lease payment provides the tenant with | | | | ==> I Pay Cash For Broken Down Ugly Houses |
| cost certainty and allows them to budget knowing that | | | | Nationwide |
| their basic housing payments will not increase. | | | | So if you own a broken down house you can sell it to |
| Guaranteed Purchase Price | | | | Payton Lowe for cash. I strongly sudgest you contact |
| In addition to a fixed monthly lease payment a | | | | Payton Lowe on the next page before it's too late. |