Lease to Own / Rent to Own
In the real estate world, the term lease to own or more popularly known as rent to own is an agreement where the tenant has the option to buy the property at a certain price at a point of time in the future. Other terms used to refer to such an agreement could be owner financing, lease option or lease to purchase option.
The lease is similar to a usual rental lease where the landlord (or land owner) allows the lessee (the other party) to live in a certain property with an agreement to pay a certain amount every month. At the end of the term, a certain percentage of the monthly payment will be converted to a down payment under the condition that the lessee will make on time payments.
Typically, the purchase price of the property as well as the date that it can already be bought is specified in the agreement. And in most cases, an upfront payment for the security deposit is required. This amount will be used as collateral and it will not earn interest until the end of the term. After this point, the security deposit will then be converted to down payment.
Proper execution of the lease to own program could mean an exceptional opportunity to own property. However, very few people across Canada have been given the chance to avail of this kind of program.
You can already get a lease to own contract with as low as a 4% down payment. This is especially catered to people who find it hard to save enough for a mortgage or those with poor credit.
You can give us a call at The Mortgage Emporium if you want to know more about Lease to Own options.