A Typical Deal

An Example of a Typical ‘Rent To Own’ Deal

Lets say that you have been renting for years, and you have already Lost Tens of Thousands of Dollars in Rent Money, that you will Never Get Back. Your credit score is in the mid 500’s, and is below average, so you could not qualify for financing to purchase your dream home.

Lets assume that you have a good steady job, you make decent income, you have some money put away, but you STILL CANT QUALIFY FOR A CONVENTIONAL LOAN WITH A BANK!

Lets see what our Rent To Own Program can do for you...

Here is a rough formula that will let you know what value of the home you can afford:

YOUR MAXIMUM MONTHLY PAYMENT =
(Your Combined Family Monthly Income Before Taxes ÷ 3) - Heat/mo - Property Taxes/mo

So if your combined family income is $6,000 per month, then using the above formula:

($6,000/mo ÷ 3) - $70/mo heat- $150/mo Property Taxes = $1,780/mo

So you would be able to afford $1,780 per month for your house payment.

We have established how much 'House' you can afford. We now need to know if you can afford the payment to support his house. This is called TOTAL DEBT SERVICE RATIO (TDS). 

TDS is what Banks and Lending institutions will look at. It tells them if you can afford the payment to support the purchase of your House. 40% or less, is usually acceptable.

TOTAL DEBT SERVICE RATIO (or TDS), is defined as follows:

TOTAL DEBT SERVICE RATIO (TDS) = 
Your Total Monthly Debt ÷ Gross Monthly Income

Lets say your monthly expenses are as follows: 

-Credit Card payments $200/mo

-Personal Loan $100/mo

-Car Loan $250/mo

-House Payment $1,780/mo

And lets say that your Gross Monthly Income is $6,000 per month, then using the above formula:

($200 + $100 + $250 + $1,780) ÷ $6,000 = 39%

So in this case, you are under the 40% rule, and you would have enough income to support the purchase your home.

You have now determined the purchase price of the home that you can afford.

Great! - Now you browse though our listings, or Any MLS listing, and you find a house with the following description.

Crystal Street
234 Crystal St
$289,900

Absolutely stunning! two storey home with 3 bedrooms and 1.5 bathrooms. Recently re-decorated throughout, with Newer kitchen and ceramics, microwave, KitchenAid appliances, gas range, plus a water filtration system. Includes washer, dryer and freezer. New roof and new furnace. Main level floors feature hardwood and ceramic tile, upper level features parquet hardwood flooring and ceramic tile bathrooms. Plenty of storage and automatic Garage Door Opener.

Professionally finished lower level with office/den. Walking distance to neighborhood amenities, parks and minutes from major highways, 401, 403, and 407.  

Available on a RENT TO OWN program for 3% down, and $1,700/month. Seller to give Generious monthy cash back credits to cover your Down Payment in 1.5 years of renting to own.

You decide that this nice cosy house might be exactly what your are looking for. You meet the requirements for the Rent-To-Own Program, and decide that it is much better to Rent-To-Own this property for $1,700 per month. And with the generous rent credits you will receive, you will have enough to use this towards closing in 1-2 years. Now there is no more wasting money renting! This way, you are building up equity in a home that you will eventually own. 

Different programs vary, so please check each listing carefully.

If after looking at the numbers, you may decide that you would like to try this Rent To Own Program - instead of just renting, you simply need to fill out the online ‘Pre-Approval Application’, and after you are approved, you can inspect the houses we have to offer!

rented-home

It is that simple!



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All calculated estimates are approximate only. Factors such as bank interest rate, credit score, etc., can change these estimates