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Purchasing a home is a milestone in many individuals' lives. Not only is it a mark as coming of age but it is a major asset to help you build financial security. The most reliable form of wealth comes from owning real estate, but what if you can't get approved for a mortgage? This is a realization that many people are dealing with today. Banks are constricting the amount of loan and mortgage applications due to the recent recession and tightening of the mortgage approval process. Now, many people are left in the dark about how to reach the goal of home ownership.
If you have no credit rating or bad credit, not enough finances for a large down payment, are new to Canada or are self-employed, you might face these obstacles. Luckily there are solutions to the problem of obtaining a traditional mortgage. The real estate market relies on people consistently buying and selling homes. For those of you who fit into the aforementioned categories, the lease to purchase option is just for you.
Many of us come out of school, land a job and hope to purchase a home down the line. We can become side tracked due to a variety of reasons, or because of credit, and getting back on track can seem like a nightmare. Some of us come into hard times and have had to declare bankruptcy or have fallen into a bad credit rating. The lease to purchase homes option allows us to work through financial hardships and be on our way to home ownership.
Your first step is to call a reliable rent to own homes company like Sandstone Management in Canada. They go through your situation and finances with you and set a budget and timeline for your lease to own. A realtor helps you find the ideal home within your predetermined buying price. Sandstone checks the home for fair value, structural soundness, defects, etc., to be sure the home is a good investment. You pay a small down payment (usually 5%) and reasonable monthly lease payments for a short fixed term that lasts 1 - 3 years. During this time, a portion of your payment is set aside to make up a small down payment. When the fixed term is over, you will apply for a mortgage on the same home with your new found equity and more favorable credit rating that their mortgage counselors help you achieve. Since the price of the home is pre-determined for after the lease period, you benefit from any rises in the market and any work you put in. You can start building equity before you even own the home!
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