Rent-to-own homes in Ottawa are becoming a popular alternative to buying and selling your home. These homes come with flexible terms that allow you to rent for some time and then purchase the home at an agreed-upon price. If you’re thinking about this option, there are some essential factors you need to know before making any decisions.
You need to have good credit: The first thing you should know about buying a rent-to-own homes in Ottawa is that you must have excellent credit. It’s also important to show the owner that you are responsible over time with your payments and can make timely mortgage payments once the terms of the deal transfer into ownership. There is a lot of money at stake when you buy a home, and the owner is relying on your payments to get him his return.
The more down payment you can pay upfront: The larger the initial down payment, the better chance you will have of purchasing the home outright. This might mean paying in full for one year’s worth of rent. However, if you can’t do that upfront, it’s essential to show the owner that you intend on making payments every month with a portion going toward equity in the home.
Be prepared for some terms: Rent-to-own homes are best suited for people who are renting and would like to eventually purchase their own home. The homes are available on a short-term lease with an option to purchase during or at the end of the lease. When renting a home from a rent-to-own company, you might also be required to pay for closing costs and other expenses when purchasing the home.
Pay close attention to the contract: You should read through any imposed contracts carefully before signing them. The term of your agreement will be outlined in its entirety in these contracts, so you must be aware of what is expected once you become the owner of the property. For example, some companies ask that only one family member resides in the house while others allow entire families to live comfortably together. You must determine if there is room for future growth.
You might have to pay a lot more for homeowner’s insurance: Rent-to-own homes are considered high-risk properties, so your rates will be costly. You might end up with higher premiums than you would have paid if you were purchasing the home outright.
Pay attention to the company you choose: There is no standard contract for rent-to-own contracts, especially since these types of deals vary from state to state and even county by county. Be sure that you read all terms carefully before agreeing on any deal. If you’re not certain about what something means or want some clarification on the clauses in your contract, call an attorney who can explain the laws where you are renting the property and help draft the proper paperwork.
Make sure you have a plan for once the term is up: You’ll need to determine how much money you can afford and then get a lender on board who will finance your purchase. If you need an extended period, it’s essential to determine what kind of penalties might be imposed if you do not make all payments on time.
Never miss your chance: When the option date arrives during which you can buy the home, it’s easy to procrastinate and neglect the responsibilities at hand. However, always keep in mind that you never know when these deals could end or expire, and all terms must be met so that your deposit money doesn’t go to waste. You don’t want to put down thousands of dollars for a home and then not be able to buy it at the end of your contract.
The payment period: The length of the payment period will vary from state to state but usually ranges anywhere from 6 months to 2 years. You can also choose a shorter or longer time frame based on your preference. Be sure that you do well on all terms and conditions, as the owner might ask you to leave or hold an option so that he can sell the property to another renter.
As you can see, there are many issues to consider when choosing to rent-to-own a home. You need to have good credit and be prepared for the possibility of higher insurance premiums. If you want more information on properties in your area, contact a real estate agent specializing in rent-to-own homes or visit websites specializing in this type of property. After thinking about all of these things, it might be cheaper for you just to buy a home outright instead of going through the option of renting with an option to purchase.
If you’re willing to put down some money upfront and wait on the other payments until after the lease agreement is up, there are some great deals out there. Paying for closing costs and upfront payments is a great way to save money on a down payment while still getting the property of your dreams.