While you think about buying a new home, things that come into your mind are savings, location, finance & property. One of the most important amongst them is savings. Because if you have good savings then paying down payment is no more headache for you. How much money do you save to pay the down payment? It's good to have enough down payment, but what happens if you have limited or no down payment? You are only left with a few choices of borrowing money from somewhere or just forget the dream of having a home till you save that much money. Nope, still there are ways to get your home with limited down payment. Let’s see, what can be done during this situation and which way helps you to get your home.
Before going that way, it is necessary to understand what down payment is and why you need to pay for it.
What is a Down Payment Amount?
Down payment amount is a sum of money that as a buyer you need to pay in the initial stage of property buying. The Down Payment represents a part of the total purchase price, and for the remainder the buyer will often take out a mortgage. Here’s we breakdown the down payment calculations into simple parts, so you can understand better.
For Toronto
- If Property price is below or equal to $5,00,000: Down payment will be 5% of the purchase price
- If Property price is in between $5,00,000 to $9,99,999: Down payment will be 10% of the purchase price
- If Property price is $ 1 Million or above: Down payment will be 20% of the purchase price
How does Low Down Payment Work in General?
A low down payment option is the point at which you get money for your initial installment, meaning you don’t need to spend your money in the initial stage. It is important to be familiar with something many refer to as closing costs. Closing costs are nothing but the expenses and administrations you want to pay to seize the property deal. This includes legal expenses, land move charges, home inspection tests. These expenses and charges are excluded from an initial installment. You should connect isolated subsidizing to take care of related expenses.
You will likewise require a deposit prepared while making a proposal to the dealer, yet that can generally be a level of your up front installment.
Role of Rent-To-Own Program in low down payment home buying
But first, what is ‘Rent-To-Own’? It is the process/program that allows buyers to lease a property with an option to buy. You all are having a question is- how is it connected to the low-down payment option? Yes, it has a connection. In the rent-to-own program, you pay a little more in rent than the fair market value. Eventually, this extra money you’ve paid becomes your down payment at the end of the lease. You may/ may not have to pay additional fees of 2-7% of the actual value of the home. You already hold the option of buying it.
Rent-To-Own Now: A ray of hope for those who want to buy a home
Our Rent-Own program helps you to get your home. You have to pay the rent along with living in your home. You can secure your home too without any additional security money. Thus, you can build your equity by doing the same routine you have followed for several years- paying rent. This program not only helps you to get your home ownership, but also works closely with your credit score & financial betterment. Credit score betterment indeed helps you in future to buy assets via loan with easy pre-approval. So, the Rent-To-Own program serves the best mortgage related solution along with a vision of helping every individual having their own home.
Benefits :
1. Save yourself from Renting
If you compare living on rent OR use our Rent-to-own now program to buy a home- 99 out of 100 says the second option is the best. When you are renting, every time you pay but don't get anything. But, if you buy a home, that changes because you will start building equity.
2. Make stronger Net Worth
The faster you start owning assets, the faster you start building equity for your future. Once you get a mortgage or a loan for a car- this helps you grow your net worth. This means that every time you pay for your loans, your total net worth gets better and better.
3. Mortgage Insurance
This is something unavoidable while thinking about buying a home. You can save your time & money along with that you can avail default mortgage insurance. Because, building assets with future safety is always a good option.
Final Words
Yes, there are ways to get your home with literally low down payment. Rent-to-own program is one of them. You can actually enjoy living in your dream home just by paying a small amount as rent. It is a bit greater than home fair market value. It counts as the down payment amount. You also have the option to secure that home without paying anything. So, it's totally a win-win situation for you if you want to buy a home & have no down payment.
If you want to know more about the Rent-To-Own program & having any query regarding how to buy a home without down payment- we’re ready with the answers. You just have to contact us.
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