Rent-to-owncontractsseemtobemorefrequentoverthepastcoupleofyearsduetoeconomicconditionswhichpreventpeoplefromselling
theirhomesasquicklyastheywant.
Thisoptionisidealforinvestorsasarevenuepropertystrategyandforbuyerswhoareunable
toqualifyforamortgagerightaway.
JackieWoodward//TMG//780-433-8412//[email protected]
RENT-TO-OWNHOMES:TheBasics
Therearerisksthataccompanyarent-to-owncontractforboththesellerandthe
buyer.
Continuereadingforwhatyouneedtoknowaboutrent-to-owncontractsfroma
>inancingperspective;
JackieWoodward//TMG//780-433-8412//[email protected]
RENT-TO-OWNHOMES:TheBasics
WhatisaRent-to-OwnContractandhowdoesitwork?
JackieWoodward//TMG//780-433-8412//[email protected]
RENT-TO-OWNHOMES:TheBasics
Arent-to-owncontract,orsometimescalledanoption-to-purchaseagreement,iswhererenterspaymarketrenteachmonthtoliveinaspeci>ic
property.
Attheendofasetperiod,usually1-3years,theyhavetheoptiontobuytheproperty.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?
Thebuyerandtheseller/owneragreeonapurchasepriceatthetimetheywritetheoriginal
agreement.
Thismeansthepurchasepriceisset1-3yearspriortowhenyouactuallyhavetoqualifyfora
mortgagetopurchasetheproperty.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?Whatisarent-to-owncontractandhowdoesitwork?
Ontopofthemonthlyrentalamountagreedupon,theseller/ownerwillcollectanadditionalamounttogotowardsyourdownpaymentwhen
you“close”ontheproperty.
Theseller/ownermayalsorequestaninitialdepositatthetimeyouenterintotherent-to-own
contract.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?Whatisarent-to-owncontractandhowdoesitwork?
Makesuretoinquireifeitheryourinitialdeposit,orthemonthlyamountgoingtowardsdownpayment,isrefundableintheeventyoudon’tproceedwiththepurchaseattheendofthe
contractterm.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?Whatisarent-to-owncontractandhowdoesitwork?
Ifyouareunfamiliarwithsomeofthetermsusedinthecontract,contactaprofessionalforguidance,whetheritbearealtor,lawyeror
mortgagebroker.
Alwaysbesureyouknowexactlywhatyouareagreeingtowhenyouenterintoarent-to-own
contract.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?Whatisarent-to-owncontractandhowdoesitwork?
ADVANTAGESOFaRent-to-OwnAgreement
JackieWoodward//TMG//780-433-8412//[email protected]
RENT-TO-OWNHOMES:TheBasics
Ifyou’reabuyerwhocan’tqualifyforamortgagerightnow,arent-to-ownallowsyoutomoveinto
thehousenowandbuylater.
Thisgivesyoutimetoeither>ixyourcredit,accumulateyourdownpayment,ordowhateverelseyouneedtodoinordertoqualifyfora
mortgage.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?AdvantagesofaRent-to-OwnAgreement
Ifyouareasellerwhocan’tsellyourpropertyquickenough,arent-to-owncontractcouldeliminatehaving2mortgagepayments.
Yourrenterswillbecoveringyourmonthlymortgagepaymentontheproperty,andyou’ll
knowhowmuchyourpropertywillsellforattheendoftherent-to-ownterm.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?AdvantagesofaRent-to-OwnAgreement
DISADVANTAGESOFaRent-to-OwnAgreement
JackieWoodward//TMG//780-433-8412//[email protected]
RENT-TO-OWNHOMES:TheBasics
Thepurchasepriceissetatthebeginningoftheterm.Evenifotherhousingpricesriseorfallduringthattime,theoriginalagreed-uponsale
priceis>inal.
Iftheappraisaldoesnotsupportthevalue,therecouldbealimitonhowmuch>inancingthebuyer
isapprovedfor.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?AdvantagesofaRent-to-OwnAgreement
Allofthoserepairsthatusedtobesomebodyelse’sprobleminarentedpropertyoftenbecometheresponsibilityofthenewbuyer,evenduring
therentalperiod.
Ensureyouhavebudgetedforhomerepairsifyouarethefuturebuyerinarent-to-own.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?AdvantagesofaRent-to-OwnAgreement
Somerent-to-owncontractsarenotsuitabletoamortgagelender.
Theagreementmustclearlyoutlinethepurchaseprice,initialdepositamount,monthlyrentalamount,andamountgoingtowardsthedown
payment.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?AdvantagesofaRent-to-OwnAgreement
Andagain,itmustspecifywhetherornotanyofthoseamountsarerefundableshouldthecontract
notbehonoredforonereasonoranother.
It’salwaysagoodideatospeakwithamortgageprofessionalfamiliarwithrent-to-owncontractspriortocommittingtoalongtermagreement.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?AdvantagesofaRent-to-OwnAgreement
Knowandunderstandwhatyouaregettingintobeforesigning!
Makesuretheselleriseducatedontheprocessbothofyouneedtofollowinorderforyouto
eventuallyqualifyforamortgageattheendofthecontractperiod.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?TipstoRemember
Makesurethepurchasepriceyouareagreeingtowillbeinyourpricerangewhenitcomestimeto
close.
Doyourresearchtoensureyouarepayingfairmarketvaluefortheproperty.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?TipstoRemember
Ensuretherentalamountyouwillbepaying,notincludingtheextratowardsthedownpaymentcredit,isreasonableforthetype,conditionand
locationoftheproperty.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?TipstoRemember
Beawareofwhattypeofrent-to-owncontractisrequiredandacceptedbyboththelenderandthe
mortgageinsurancecompany.
Talktoamortgageprofessionalpriortoselectingacontracttermtoensureyoucanqualifyforamortgageamountsuf>icienttopurchasethat
homewhenthecontractisdue.
JackieWoodward//TMG//780-433-8412//[email protected]
Whatisarent-to-owncontractandhowdoesitwork?TipstoRemember
Jackieworkswithbothrent-to-ownsellers/ownersandbuyers.
Helpingthesellers/ownerspre-qualifytheir
potentialbuyerstomakesurethecontracttermsaresuitedtothebuyersborrowingabilities.
Workingwithbuyerstohelpthem>ixtheircreditandbudgeteffectivelytoensuretheycanqualify
foramortgagewhenitcomestimetobuy.
Whatisarent-to-owncontractandhowdoesitwork?TipstoRemember
JackieWoodward//TMG//780-433-8412//[email protected]
JACKIEWOODWARD
RENT-TO-OWNHOMES:TheBasics
MortgageExpertTMG&Mortgagegirl.caPhone:780-433-8412TollFree:866-932-8412Email:[email protected]:www.mortgagegirl.caFollow:@mortgagegirlca