A lease Option is a form of Rent to Buy.
We use the Lease Option program to provide short-term financing for a few years while you build your credit. Our goal is to help you qualify with a financial institution in the future. As long as you can afford the small up-front payment and the weekly or monthly payments, you're fast on the way to home ownership with Home Options Ltd.
We're private investors who know that the path towards home ownership today is very tough, and we have the flexibility that banks and other mortgage lenders don't. We understand that anyone can have some financial difficulties as they work towards the goal of owning a home.
A lease-option is a combination real estate rental, sales and finance technique. It is a property lease for a fixed period of time, (12 or 24 months - sometimes longer), with an option for you to buy the property at an agreed option price at any time during the lease period.
We are here to get you into your own home as easily as possible, you live in it and build up your deposit and/or improve your credit. Then when you are ready to buy we will help you arrange a home loan, and because the price is locked from the day you move in, any capital gain that occurs while you wait is all yours! This means you will be in a very strong position later when you take over the financing of your own home with a traditional home loan.
Capital gain is the gain on the sale of a capital asset. For property it is the difference between the original purchase price and the selling price.
So if you purchased a house for $320,000 and later sold it for $380,000 - you have a capital gain of $60,000.
With a lease-option you have the "exclusive" right, but not the obligation, to purchase the property. The option price is set at the current market value when signing the lease-option during the early period of the agreement. You benefit from the Equity increase of rising house values as the house price is frozen at the beginning of the Lease Period.
Many home buyers can afford the monthly payments but they have often have insufficient cash for a down payment. The lease-option solves this problem by giving the tenant-buyer a weekly credit towards the down payment. It's like a "mandatory savings scheme." Also further savings are made as we still pay the rates and insurance on the property.
You pay an amount similar to the standard bank repayments on a mortgage and receive a monthly rent credit which is used at the end of the Lease Option term as the deposit for a bank loan.
Buyers like lease-options because little up-front cash is required. Perfect for you if you don't have enough deposit for a bank mortgage.
Lease Option advantages are as follows:
• Helps you qualify for a bank loan
• Helps you save a deposit
• Gives you free equity - You get to keep any increase in value as per your contract.
• Flexible payments to suit your goals
• Gets you into your home, immediately
• You can add value to your home by improving it yourself
• No waiting for landlord to do repairs
• No property managers
• Try out the neighbourhood before you buy
• No commitment to buy until you are ready
• No real estate agents
• Easy to get out if circumstances change
