-The rights of a home owner with the benefit of time-
What is Rent to Own? Watch the video below.
Buying a home through Rent to Own involves 2 legal documents –
1. Residential tenancy lease 2. Option Agreement
This contract gives you total control over the house;
you move in straight away
you can make improvements to it
you can even sell it
In the meantime you have a locked in price that you have agreed to buy the house for and any rise in value of the property is yours to keep. The payments that you make are similar to a principal and interest loan – some of the money you pay is rent some is paying off the price of the home.
You put down a small deposit when buying a Rent to Own house (much less than what the bank would require, usually only 3-5% of the price of the house), this deposit comes off the purchase price of the house.
You are given a period of time to purchase this house. The time you are given will vary depending on how long it is likely to take for you to become ‘bank ready’. We always give you 1 year longer than you need and with a clause in the contract allowing you an extension in time should you not be able to get a loan by the end of your term.
Rent to Own would be great for you if can’t get a bank loan straight away due to:
-bad credit
-self employed (can’t show tax records)
-don’t have big deposit
-new migrant
-discharged bankrupts
-newly divorced
Have a look at the legal side of Rent to own
Your questions questions answered
Q -What are the weekly payments on a rent to own?
A -The payments are calculated the same as the bank, you pay principal and interest. Usually we charge 1% higher than the major banks due to the risk we are taking to give you home ownership.
Q -Do I need a solicitor to enter into a Rent to own house?
A -Yes you will need a solicitor to act on your behalf to make sure that you understand the agreement that you are entering into.
Not all solicitors are the same and we recommend that you use a solicitor who specialises in ‘Terms contracts’. We can recommend several solicitors that can do this contracts quickly and inexpensively.
Q- Do I own the house under a rent to own?
A- You have legal control of the house, but the equitable title remains in the owner’s name until you exercise your option to buy the house.
If having title of the house is an issue for you, you may want to look into the option of Seller Finance.
Q- How much deposit do I need to put down on a rent to own?
A- Usually 3-5% of the value of the house, if you don’t have any money at all, you can enter into the Savings Program or you may be able to pay the deposit off in installments.
Q- What happens if I can’t get a loan at the end of my term?
A- We will give you an extension. Your contract includes a clause entitling you to an extension in time if you reach the end of the term and are unable to get a bank loan.
Add your own question email info@owndontrent.com.au
Seller Finance
– Instead of the bank financing you- the seller finances you-
(the seller becomes the bank)
Seller Finance
Basically the seller of the house become the bank. Seller Finance is known in legal terms as an ‘installement contract’. Seller finance looks like Rent to Own but has different legal issues;
– You have equitable title of the house (the house is in your name)
– You can use the first home owners grant to go towards your deposit
– If you are not a first home owner you will need to pay stamp duty
Seller finance would be great for you if you can’t get a bank loan due to;
-bad credit
-self employed (can’t show tax records)
-don’t have big deposit
-new migrant
-newly divorced
-you have a religious belief against using the banks (eg Islamic)
Find out about the legal side of Seller Finance
Your questions about Seller Finance answered
Q- How can I use my First home owners grant if the seller still has a debt on the property
A- The state revenue office recognises Vendor Finance as a legal sale. Call the state revenue office and ask them ?
Q- Is the house is my name under Seller Finance?
A- Yes you have equitable title of the house.
Q- Do I still have to swap to the bank in the future?
A- Every situation is different. In most cases people want to swap to the bank once they are able – see why would I want to swap to the bank.
Q- What are the payments under seller finance
A- We usually charge 1% higher than the major banks due to the risk that we take on to help you acheive home ownership
Add your own questions, email info@owndontrent.com.au
Deposit Finance
-Bank gives you most of the money- we give you the rest-
What is Deposit Finance? Watch the video below.
Deposit Finance
Some people tick almost all the boxes when going for a bank loan, the only thing they are missing is the deposit. Let’s face it, with property prices in Sydney the kind of money you need to come up with as a deposit is huge. Plus if you have less then a 20% deposit to put towards your house you also have the added cost of mortgage insurance.
So we make it easier for people to get into their own home.
Basically if you can qualify for an 80% loan from the bank, plus come up with a small deposit, we will finance the rest.
It usually works like this
Banks loan- 80%
Small deposit from buyer 3-5%
We finance – 15%
The benefits of Deposit Finance are:
Smaller deposit needed
No mortgage insurance
Interest rate is same as the bank
Own your home sooner
Have a look at the legal side of Deposit finance
Your questions about Deposit Finance answered
Q- Do I have to have good credit to get deposit finance?
A- Yes this is the only method in which good credit is required.
This is because you need to appease the bank. If you have credit issues you are better off exploring
rent to own or Seller Finance.
Q- Do you help us to get the loan from the bank or do I have to do it myself?
A- We can help you, we have a strong team of expert mortgage brokers ready to help. (If you prefer to do it yourself you may)
Q- How long is my loan for the deposit?
A- Most of the time the deposit loan is shorter than the bank loan for example your loan with the bank may be 30 years and the loan for the deposit can be from 3- 8 years
Q- What interest rate do you charge for the deposit loan?
A- You pay exactly the same rate as your bank loan
Q- If I want to pay the deposit off quickly can I?
A- Yes absolutely!