Rent To Own

Rent To Own Mortgages

Everything You Need to Know About Rent-To-Own Mortgages

Rent-to-own homes offer advantages over other mortgage options. They may help you get the home of your dreams on less than a traditional mortgage, and they may also be the right option for you if you can’t qualify for a mortgage at all. Rent-to-own homes are contracts that you sign, in which you agree to rent the home for an agreed-upon period of time. At the end of the rental period, you can either buy the home for a fixed price or buy it for a fixed price and pay an additional fee for making the purchase. This option appeals to some people because it allows you to get the home of your dreams but with a less-risky investment. However, you should also be aware of some potential pitfalls.

What is a rent-to-own mortgage?

A rent-to-own (RTTO) mortgage is a type of residential mortgage where you make monthly payments to the lender in exchange for the right to buy the home at the end of the contract. The most common form of a rent-to-own contract is the lease option contract, in which you rent a home from a landlord and, at the end of the lease term, buy the home for a predetermined price. Other forms of RTTOs exist, though. For example, you can also rent an apartment that you own freehold, or you can rent a houseboat or a mobile home.

Pros of a rent-to-own mortgage

It’s important to remember that any type of mortgage comes with risks. However, depending on your circumstances, a rent-to-own mortgage may offer some advantages that can outweigh those risks. For example, some qualifying individuals may find that a rent-to-own mortgage is a good option for them because they don’t qualify for a mortgage or because they’re financing a home purchase with cash they don’t want to tie up in a rental property. Or, a rent-to-own mortgage may be a good option for you if you want to make a large, immediate down payment. (A 20% down payment can get you a much more attractive interest rate than a mortgage with 10% down.)

Cons of a rent-to-own mortgage

Just as there are advantages to choosing a rent-to-own mortgage, there are disadvantages, too. For one, since you’re financing a portion of the home purchase via monthly payments, you’ll likely have higher monthly expenses than if you were to make a larger down payment and finance the entire purchase. Similarly, when you own a home in rent-to-own, you’ll likely have a higher mortgage payment than you would with a conventional mortgage. (A larger down payment means a lower mortgage payment.) You’ll also need to factor in potential additional costs, such as maintenance, vacancy, and property insurance. These costs may be higher in some cases because you’re renting a home.

How do you qualify for a rent-to-own mortgage?

If you have a steady income and are able to make monthly payments, there are a few factors that may make you qualify to take out this  mortgage. Perhaps the most important factor is your credit score. To get a good credit score, you need to be able to show the credit bureaus that you’re financially responsible. These mortgages often require good credit, but you may qualify if you have poor credit or no credit at all. (In some cases, lenders will even allow you to purchase a home with no credit score.)

Risks of a rent-to-own mortgage

Just as there are advantages to choosing this mortgage, there are disadvantages, too. For one, since you’re financing a portion of the home purchase via monthly payments, you’ll likely have higher monthly expenses than if you were to make a larger down payment and finance the entire purchase. Similarly, when you own a home in rent-to-own, you’ll likely have a higher mortgage payment than you would with a conventional mortgage. (A larger down payment means a lower mortgage payment.) You’ll also need to factor in potential additional costs, such as maintenance, vacancy, and property insurance. These costs may be higher in some cases because you’re renting a home.

What to consider before choosing a rent-to-own mortgage

There are a number of factors to consider before choosing this mortgage. The first is your expected monthly payment. Since you’ll be making both the mortgage payment and the rent payment, you need to know what your budget allows for each monthly expense. Similarly, you need to be aware of any extra costs that may apply to a rent-to-own contract, such as maintenance, property insurance, and taxes.

Key takeaways

Rent-to-own homes offer advantages over other mortgage options. They may help you get the home of your dreams on less than a traditional mortgage, and they may also be the right option for you if you can’t qualify for a mortgage at all.

There are a number of factors to consider before choosing a this mortgage. The first is your expected monthly payment. Since you’ll be making both the mortgage payment and the rent payment, you need to know what your budget allows for each monthly expense. Similarly, you need to be aware of any extra costs that may apply to a rent-to-own contract, such as maintenance, property insurance, and taxes.

We here at Capital Mortgages look forward to assisting you with Ottawa mortgage needs and approvals. Contact us today by calling us at: 613-228-3888 or email us direct at: info@capitalmortgages.com

You can use these links to APPLY NOW or CONTACT US.

You can also click here.

Mortgage Protection Insurance Capital Mortgage Brokers in Ottawa

The Importance of Mortgage Protection Insurance

The Importance of Mortgage Protection Insurance in an Economic Downturn

Mortgage protection insurance is a policy that helps protect your home and property if you are unable to make mortgage payments due to death, disability, or involuntary loss.

It’s important to have this insurance in place so that you can avoid foreclosure on your home when unforeseen events happen. This insurance may be a wise investment for those who are looking for additional financial security in the event of an economic downturn. To get started, find out if your lender offers this type of mortgage protection insurance, and speak with them about what might be included in the policy.

What is mortgage protection insurance?

Mortgage protection insurance is a type of insurance that helps protect your home and property if you are unable to make mortgage payments due to death, disability, or involuntary loss. This insurance may be a wise investment as it provides additional financial security in the event of an economic downturn.

Who needs mortgage protection insurance?

Mortgage protection insurance is an important investment for those who are looking for additional financial security for themselves and their families. This type of insurance provides you with the ability to make sure that your mortgage is still being paid if the unthinkable happens and you or someone in your family becomes disabled, dies, or has an involuntary loss. It can be a wise investment for those who are concerned about an economic downturn and want to make sure they’re protected in the event of foreclosure on their home.

Ottawa Mortgage Brokers: Capital Mortgages Ottawa, Ontario

How does it work?

Mortgage protection insurance is a policy that offers a degree of financial protection to your home and property if you are unable to make mortgage payments due to death, disability, or involuntary loss.

How does this insurance help in an economic downturn?

Mortgage protection insurance is a type of policy that helps protect your home and property if you are unable to make mortgage payments due to death, disability, or involuntary loss. The  insurance will help you avoid foreclosure on your home.

In an economic downturn, such as the 2008 recession, people are no longer able to afford their homes. So if they have this insurance then they have a better chance of keeping their home during an economic downturn in the housing market.

Furthermore, the mortgage protection insurance is a great investment for those who are looking for additional financial security in the event of an economic downturn.

Conclusion

Protect your mortgage by adding this insurance to your home insurance. Insurance is a cost and it is worth it to ensure that if something were to happen to your home, you would still be able to afford the monthly mortgage payments. When the housing market crashed in 2008, those who purchased protection insurance were still able to make their payments.

We here at Capital Mortgages look forward to assisting you with Ottawa mortgage needs and approvals. Contact us today by calling us at: 613-228-3888 or email us direct at: info@capitalmortgages.com

You can use these links to APPLY NOW or CONTACT US.

You can also click here.