Monday, May 8, 2017     Marion Goard     Financial Health House and Home Buying and Selling

Featured Photo

Renting to own, also known as a lease option, is another choice in today's real estate market. Traditionally, if you were looking to purchase a home, you would save 20 percent of a home's cost for a down payment and get a mortgage up front from a financial institution.

That option may be challenging if you have a bruised credit history, or you don't have an adequate down payment, if you are new immigrants with little or no credit history or are self-employed.

Renting to own means you can save for a down payment while actually living in the house you want to buy. Usually, a portion of the monthly rent is set aside toward the down payment and there is often a significant deposit as well. At the end of two to four years, the down payment is collected and the renters apply for a mortgage.

Although it sounds like a win-win, there are pitfalls to watch for. Your monthly rental costs, due to the down payment portion, will usually be substantially higher than a regular rental. If you're a renter in this kind of arrangement and you must break the agreement, you risk losing your deposit and the monthly savings in order to walk away. That could mean the loss of tens of thousands of dollars. If you still don't qualify for a mortgage at the end of the rental period, you may have to walk away from the home and from your money too. If you're late on a monthly payment, you could be evicted, forfeiting your cash.

As with any contract that involves large amounts of money, make sure you obtain legal counsel before you sign on the dotted line. Make sure your investment is protected and that there is a clause for breaking the rental agreement that won't break you!


  Go Back

Testimonials

  Marion had completed a number of sales in our community -- and she had worked very hard to have a professional and supportive presence there. When we first contacted Marion, we were a long time away from wanting to/being able to take action. She worked with us throughout this period and provided very helpful market research. along with specific information about prospective properties for us once we were ready to sell. The production of sales material on our home was creative and impressive. She was able to capture its special features, and showcased beautifully the expansiveness of the property. We enjoyed working with Marion. She was patient and supportive and understood that the second half of our initiative (the purchase) was just as important as the first. Thank you, Marion.

Carol Kalbfleisch, Burlington

Read More Client Testimonials