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Rent-to-buy your home
Article About   Sydney< AUSTRALIA

SYDNEY families struggling to scrape together a home deposit or unable to cope with a bank mortgage are turning to rent-to-buy schemes in increasing numbers.
  
  The scheme offers those desperate to get in to their own homes a low-deposit loan - often as little as 2000 - with the remainder of the loan paid as rent over the life of the loan or until the customer refinances.
  
  The total of the home is not handed over to the customer until the debt is paid off.
  
  Interest on the loan is usually 0.5 to 2 per cent higher than the bank is offering although repayments are fixed for life and couched in terms of rent.
  
  Troy Boldy is the director of one of the rent-to-own companies that have cropped up in western Sydney.
  
  He buys cheap homes and offers them to home-seekers under the rent-to-own stamp, with the customer paying him directly rather than repaying a mortgage to the bank.
  
  He says in the past 10 months his company Rent 2 Buy Houses has had more than 600 enquiries from people wanting to get in to their own home but unable to get bank loans or a deposit together.
  
  Webuyhomes.com.au is another of the companies offering a similar rent-to-own scheme.
  
  It is also reporting an overwhelming level of interest in their service.
  
  Mr Boldy said there were thousands of hardworking Australians desperate to get in to a home who can't because of their imperfect credit history or who were unable to get a deposit together while paying record rent prices.
  
  "The rent-to-buy system allows people the opportunity of home ownership without having to visit the banks because they are buying directly from the owner," Mr Baldy said.
  
  He said many of those who came to him were self-employed, recent divorcees and new arrivals.


  
  "Trying to buy your own home whether it is a house or a home unit can be quite a struggle for some people - especially when you're renting and trying to save for a deposit at the same time," Mr Baldy said.
  
  The banks can put some strict criteria on individuals and couples making it harder to get a home loan to buy their own home.
  
  For many, home ownership remains a pipe dream as the required deposit keeps rising ahead of saving rates. It can become a Catch-22 situation because the goal posts keep moving.
  
  Real Estate Institute NSW President Christine Castle said rent-to-buy was one of the more inventive ways of getting in to the housing market - forced by falling housing affordability.
  
  Ms Castle, who is also a working real estate agent, said she has seen an increasing number of friends, siblings and even work colleagues making the decision to go into a mortgage together as a way of getting in to their own home.
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