With the recent issues in the mortgage field, I have been getting a lot of questions about the Rent To Own Program I offer to first time buyers and current renters. It is a good option if you are looking to get into your first property and get closer to home ownership then later.
How does Rent to Own work
Here is a summary of events which occur during the Rent To Own Program:
- You work with me and my group as your realtor partner to find the house you want to own in the future. We work together to find the home of your choice within the price range we come up with.
- Then the underwriting department analyses your application to ensure you can afford the Monthly Lease to Own Payment and that we can formulate a plan to get you into Home Ownership in the future. Basically the underwriting department make sure they can resolve the issues that make Banks say no today.
- If you agree to the terms of the Rent To Own Program, we then ask you to send us back a signed copy of your acceptance along with supporting documents for our review.
- Then a draft of the Contracts which contain the financing details of your Lease Purchase Program will be prepared.
- You “must” take these Rent to own program contracts to your lawyer to obtain Independent Legal Advice (ILA)…it is mandatory with our program.
- Once your lawyer has given the “green light” you will need to sign and return the contracts.
- The Real Estate contracts are then signed between the Seller of the Property and your Funding Partner. Remember…your Funding Partner will actually buy the house on your behalf and you sign contracts to become the future Home Owner using our Rent To Own Program
- The rent to own deal close…you move in and we start working on the “Exit Strategy” put in place before you were approved your Rent To Own Program
Here are some other important details about the Rent to Own Purchase:
- No one is accepted into our Lease Purchase Program unless there is a clear exit strategy…The company that I deal with have been underwriting Lease Purchase Programs for over 9 years and their success is “only” based on the number of clients we “exit” into a traditional mortgage.
- The Rent To Own Company saying is “We are underwriting your file for a future mortgage and we are using a Lease Purchase Program to allow you to move in today”
- The “Future” Purchase Price is determined from Day One so you know exactly what you will pay to purchase the house in the future
- Credit Mentoring is mandatory during the Rent To Own Program
- ILA is Mandatory before the Rent To Own Program starts
Who is the client here…
The company is NOT credit driven and the clients generally fall into at least one of the categories below. They have either…
- Low or no credit score
- Business for self and can’t show income
- Collections, judgments or writs on bureau
- Property tax or income tax outstanding, tax liens
- Need to go into a consumer proposal, bankruptcy or not fully discharged
- Orphaned mortgage, current lenders not renewing
- Mortgage higher than the current market value due to market correction
- Power of sale (foreclosure)
- Total household income of $45,000 or more
Looking for help to get into a home you want now but for whatever reason can not get mortgage financing for it now, this program might be a good option.