STEP 1: DETERMINE HOW MUCH YOU CAN AFFORD.

Before you start looking through listings in the hope of finding your dream home, conduct a personal audit of your finances. Taking a serious look at all of your finances will prepare you for this huge step. You will be better able to know how much of a lease payment you can afford and if you can cover the ongoing expenses of leasing a home. A self-audit of your finances includes these three steps:

• How much savings do you have? Before you consider purchasing a home, you should make sure you have a solid savings plan in place. You also need to have two to four months of living expenses already in savings. These funds can help pay some of the initial expenses like a down payment and closing costs. Lenders will want to see that you are responsible and have a savings plan that works.
• What does your current spending look like? It’s important to know how much you spend every month. You also need to know exactly where your money is going. This step is essential for calculating how much of a mortgage payment you can afford. Make sure to account for all of your expenses, including everything from utilities to groceries and clothes to student loans. Count retirement funds, regular savings, entertainment, and kid’s activities.
• How is your credit? One aspect to qualify for a lease is that, you will need a good credit score, a solid history of paying bills on time, and a debt-to-income ratio (DTI) of about 43%. Lenders usually consider the ongoing expenses of leasing a home to be about 1/3 of your monthly gross income.  There are other options in lieu of a credit report should your credit score not be satisfactory or you are a newcomer to the country.

STEP 3: GATHERING SOURCE DOCUMENTS

Gathering your documents in advance of placing an offer to lease will greatly assist you and your real estate agent with the process, and can often place you ahead of the line with it comes to offer presentation, which is important in this competitive market.

Typical documents that should be made available to your real estate agent when submitting an offer to lease should be as follows:

• Copy of Photo ID's for all persons residing within the premises.
• Copy of most recent credit score for each person named on the lease from Equifax or TransUnion, please note that the landlord's agent will also complete their own due-diligence as part of reviewing an offer to lease with their client.
• Copy of employment verification letter confirming income and salary, for self-employed person(s), a copy of a bank account statement showing the last six months of business activity or recent notice of assessment will be sufficient.
• Completed Rental Application.

STEP 5: MAKE AN OFFER.

Once you are sure of the property you want to lease, work with your real estate agent. They will help you negotiate an offer based on the fair market value of comparable homes in the same neighborhood. When you and the landlord agree on a price, the property is conditionally leased while the leasing process gets completed. Don’t get discouraged if the offer doesn’t work out. Landlord(s) have the option of rejecting or accepting offers. Sometimes, several offers are made until successfully closing on a home. Once you make an offer, several things can happen.

• The landlord may accept the offer, and you’ll begin the process of finalizing the paperwork to complete the lease.

• The landlord may reject your offer.

• The landlord may counter back with another offer. They may not like the price or some other part of your offer. They will request changes and then accept the amended offer.

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