Remember George Bailey, the down on his luck protagonist in Frank Capra’s Christmas classic “It’s a Wonderful Life” (1946)? For those not familiar, it’s essentially a story of conflict and redemption centred on the Bailey Building and Loan Association, the only small town institution with the strength to withstand the pressures of powerful banking interests. Bailey (brilliantly played by Jimmy Stewart) has sacrificed his entire adult life to keep the company alive, because he believes in a vision of regular people escaping Depression-era slums to finance and own their homes, beyond the clutches of the ruthless banker Mr. Potter.
Can you see where we’re headed with this story?
Leaving aside the “Hollywood” ending, “It’s a Wonderful Life” has been called “the greatest financial services movie in history” for demonstrating how folks can overcome huge obstacles if they are ready, willing and able to work for it. Don’t crawl to a bank or remain captive to a heartless landlord – get the housing you deserve!
Now, back to reality…
Lease to Own Basics.
In response to the banks’ iron grip on the Canadian housing market, some people boldly put forth the ‘Lease to Own’ home financing concept many years ago. Also known as ‘Rent to Own’, this alternative offers prospective home owners who are considered too risky by traditional lenders (i.e. banks, credit unions, etc.) an opportunity to build equity over a short period. Lease to Own allows people to immediately move into their own home, improve their credit rating and demonstrate through reasonable monthly payments that they are responsible enough to handle a regular mortgage.
‘Lease to Own’ can be viewed as short-term bridge financing (i.e. 1-3 years) that helps make you a better candidate for conventional borrowing options later on. Some unique “Lease to Own” features include:
• Dealing directly with the company/person who owns the home.
• Creative but realistic financing arrangements not offered by established mortgage companies or banks.
• You are the owner from day one right after moving in; move in right away and make improvements to your home without seeking outside permission (within standard rules).
• Simultaneous credit repair and home equity growth throughout the period of your lease, to allow you to obtain your own financing as quickly as possible.
• Flexible options at the end of your initial lease, including the right to walk away if life circumstances dictate another direction for you and your family.
Reasons for Choosing ‘Lease to Own’.
Renters have so much to gain from entering into a ‘Lease to Own’ arrangement, we could probably write a book on that subject alone! For now, we’ll limit ourselves to the best reasons to stop putting your hard-earned income into the landlord’s pockets:
1. Earn Monthly Credits.
Why use your monthly rent money to build your landlord’s equity when you can use it to build up your own? By teaming up with qualified Lease To Own or Rent To Own companies, you immediately start building up a down payment that will be used to eventually purchase your home.
2. Enjoy Immediate Home Appreciation.
Any improvements that you make to your home will increase its value above and beyond your final price. This increase in the home’s value is yours to keep because most lease-to-own arrangements will lock the price of your home at the start.
3. Move In Right Away.
Why put your home ownership dreams on hold because you didn’t qualify for a mortgage? With the right innovative lease to own program, you move into your home first and deal with the bank afterwards.
4. Improve Your Credit Rating.
Partnering with an established lease-to-own company today means working with real estate professionals to improve your credit score immediately, so that you can obtain conventional financing at the end of your lease.
Who Can Benefit from Lease to Own?
• Probationary Workers.
• Seasonal Workers.
• Recent immigrants to Canada.
• Anyone looking to buy a home but in need of credit repair.
Bank monopolies just aren’t fair to regular folks. That’s why progressive home purchasing solutions like lease-to-own are growing in popularity throughout Canada. And while we may not be in Bedford Falls, nor are we living in the Depression, but one can’t help but to draw inspiration from George Bailey and his willingness to stand up to bankers and landlords on behalf of people seeking to own their homes.
“…what’d you say a minute ago? They had to wait and save their money before they even ought to think of a decent home.
Wait? Wait for what? Until their children grow up and leave them? Until they’re so old and broken down that they… Do you know how long it takes a working man to save five thousand dollars [in the Depression Era]?
Just remember this, Mr. Potter, that this rabble you’re talking about… they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath?”
– George Bailey (Jimmy Stewart) confronting Mr. Potter (Lionel Barrymore) at the Bailey Building and Loan, “It’s a Wonderful Life” (1946).
If you find yourself with the same spirit running through your body, coupled with the wanting to own your own home, but under your circumstances, traditional lenders aren’t your best solution, you might just think about contacting a Lease To Own company in your area to ask some questions.