So you want to get into home ownership but can’t qualify for a mortgage. Now what?
First, make sure you know you can’t qualify, don’t assume you can’t. Call John Antle at TD Canada Trust at 250-212-8512 and see if he can help. If not, there are many different rent to own scenarios out there.
This is how we do it at Elkridge:
A home is rented with an option in the contract to purchase the home in the next one to two years at a pre-determined price. In order to exercise that option, the renter pays a non-refundable fee called the Option Consideration. This fee typically ranges from 3-5% and is credited towards the downpayment when you’re ready to buy. There is also a negotiated percentage (usually around 25%) of the rent payments that gets applied to the purchase price of the home.
Here’s a breakdown- Let’s say you move into an Elkridge home with a purchase price of $360,000. You pay the Option Consideration of $10,800 (3% of the purchase price). Your rent is $1800 per month with 25% ($450) being credited towards your purchase. At the end of two years, you now have accumulated $21,600 for your downpayment. As I’ve said before, ask the questions and make sure you understand what you are signing up for.
To get a full explanation contact Paul Teeuwen at 250-317-9954 and he’ll be happy to walk you through the whole process.
