How Does 'Rent-To-Own' Work?
It’s easy!
1) Select any Home listed on our website HERE, or select ANY home on MLS HERE. You can choose from ANY home, not only from the Toronto MLS system, but from ANY MLS system in Ontario. If you would like to CHOOSE ANY HOME ON MLS, in other Provinces in Canada, besides Ontario, we can do this also. Please let us know. We have affiliate offices all over Canada.
Check out all the financial details for the home, and even drive by the home to check out the area. When you decide, we can create a custom Rent To Own program for you!
2) Once you decide you are interested in the Home, fill out the "2 Minute Application". We will contact you shortly thereafter and discuss all the details with you. In our Rent-To-Own program, you must have a steady income to be able to support your monthly house payments, and a small amount of money to put down as an Option Consideration (usually 3-4%). Check all the requirements HERE.
3) After speaking with you, will then contact one of our "Rent-To-Own friendly" Mortgage Brokers, and get them to give us a complete report on when you can expect to get Permanent Bank Financing. This includes a Credit Check, and an Employer Check.
Not to worry, we are not totally interested in your past credit. We may required that you be put on a credit rebuilding program while you live in the house. It usually takes 6-24 months to rebuild your credit to get you to the point where you will qualify and get Permanent Financing from a bank or other lending institution.
4) You lease your new home from us with the exclusive right to purchase it at a later date. Our tenant-buyers love our program because it gives them the time they need to save up for a larger down payment, or clean up past credit problems, or sell another home, or even try out the neighborhood before buying - all while they live in the Home. You can purchase the home ANYTIME during your lease/option period. The price is pre-determined as per the agreement, and will not change.
5) You will be paying a slightly higher than market monthly payments, consisting of a Rent portion, and also an Option Consideration portion. This extra option consideration portion will help you by placing you in to a forced savings plan. All of this option consideration will be applied towards the eventual purchase of your home. This will help qualify for the home by having a pooled amount of money that will be applied to your Down Payment. Remember that 100% of your Option Consideration money is credited back to you, along with the monthly saving portion, towards the purchase price of the home, and thus reducing the purchase price every time you pay your rent on time.
I Am Renting Now, How Is This Different?
This is a way to help you get started toward BUYING your own home, instead of just Renting. Part of your Monthly Payment goes towards the purchase. Instead of throwing your money away each month on rent and having nothing to show for it at the end of the year, with our Rent-To-Own program, each month some of your monthly payment is credited toward the purchase of the home. For example, if you were paying $1,800 a month in rent you could have $300 a month going toward reducing the price of the home. That’s a $3,600 price reduction after 12 months! We will use this money towards your Down Payment. We will insure that your 'pool of extra money', will cover the approximately 7% needed for your Down Payment. Several different senerials will be available to you depending on your income, initial deposit, credit rating, etc. Our Mortgage Broker will offer you several options for you to choose from.
Do I Have To 'Qualify' For This Program?
Not in the usual sense of having to meet certain income and debt ratios, or achieving a certain credit score as would be necessary for most mortgage companies. Your credit and finances are not the restriction they would be with a conventional mortgage company. Although it actually makes sense to buy a home this way even if you could get conventional financing today, many of our buyers do have some issues that need some time to be resolved.
I don't have 10-20% down payment. How can we buy a house?
Yes! This is where our Rent-To-Own Program comes in. The down payment on your purchase, comes from your monthly rent credits, option credits, and any other credits that are due to you under the various programs. When you decide to buy your property, we total them all up, and use this as your down payment. This amount can be as much as 5%-7% (or more) of the purchase price, depending on your lease term. With some lenders, you may even get ‘Cash Back’ at closing!
How Much Down Payment Do I Need?
We do not accept any Down Payments. What we accept is a Non-Refundable Option Consideration. An Option Consideration is what legally binds the seller to a buyer, for an agreed upon period of time, and under certain agreed upon conditions outlined in the Option agreement. It is, however, fully refunded to you once you purchase the home, and you have not violated any of the Lease/Option terms.
We require at least a 3-5% Non-Refundable Option Consideration to start the process. This is far less that you would have to pay if you were to get a Conventional Mortgage with a bank. It is also far less than the amount Realtors add to purchase price of the house on MLS to compensate for their 6% commission.
This Fee helps cover lawyers’ fees, contract fees, investor fees, credit reporting fees, and some years of property accounting and management. It also helps you qualify for future loans, since you get this refunded once your purchase the home. It is actually helping you to pay this fee!
Is The Option Consideration Non-Refundable?
Yes. If you break the lease or don’t pay your rent, you forfeit all of your option consideration money. If you don’t pay the rent, you will be evicted, just like under any other rental arrangement. You get your option consideration money credited back towards the purchase price of the home if and when you buy it.
Are There Any Other Methods of Option Consideration Considered?
Yes, Unlike most lending institutions, we accept borrowed funds for closing. If you have a close friend or relative willing to lend you money for your option consideration, you can use that with our Rent-To-Own program. Perhaps you have some other asset that you would like to exchange for an Option Consideration?, like a car, boat, or another home? Talk to us.
Are The Monthly Payments Higher Than Rent?
Yes they are. Your Monthly Payments are slightly higher to get you used to the cost of Home Ownership, and reflects what you would realistically have to pay when paying similar payments equivalent to that of property taxes, insurance, and a possible higher interest rate.
However, you will also get generous rent credits back when you purchase the property, along with a return of your initial (3-5%) up front money. Thus, it usually ends up in the 'long-run' to being cheaper than if you were just renting.
Not only that, but house prices in the Metro Toronto Area have been increasing an average of 4% per year. This means that the average house price of $375,000 has increased $15,000 per year! If you were to offset this $15,000 per year, by your monthly Rent-To-Own payments, then your monthly payments would be far below market rent.
How Can I Qualify For A Mortgage, My Credit Is Not That Great?
You can’t through conventional lenders, but you can through our Rent-To-Own Program. Even if your credit is not great, we can still help you to get in to a home. There are many Good People out there, that have Blemished Credit, but Good Income. Your credit can go Bad because of many reasons. Some of which are:
- Previous Bankruptcy
- Foreclosures/Power Of Sale
- Credit was Never Established
- Brand New to the Country
- Independent Business Owner
- Cannot Verify Income
- Divorce
- Victim of Identity Theft
- Don't have enough Down Payment
Through our Rent-to-Own program, we can help you improve and rebuild your credit over time. We are not extremely interested in your past credit status. Your ability to make reasonable monthly payments and your desire to be a homeowner are more important to us. We work with 'Rent-To-Own Friendly' Mortgage Brokers who will help arrange a loan for you. It is absolutely critical that you pay your rent on time every month in order to get approved for a mortgage.
You may not qualify for a conventional loan now, but in a year or two or three, and with some credit rebuilding and coaching, you should have an excellent chance to qualify. In the meantime, you can be living in and enjoying your home.
How will I be sure that I will eventually own the home?
Our Mortgage Brokers will give you a complete, comprehensive, financial analysis and Home projection analysis.
Every potential buyer in our program, gets to know about their credit history, rental analysis, financial analysis, and a good estimate and projection of their probability to get future financing. You get this professional analysis and opinion, in writing, directly from several licensed professionals. We run all applications through a mortgage broker that specializes in Rent To Own Homes, and several Licensed Realtors, who also specialize in Rent To Own Homes. That way you are assured that you have some 'piece of mind', and a great chance towards homeownership BEFORE you enter the program.
We will never suggest that you proceed with one of our Rent To Own programs, if you have no chance to complete your final purchase.
All of the requirements are located HERE.
How do I build up my Poor Credit?
By paying on time, you will be showing a potential home lender that you are capable of handling this property financially. This will help you gain the credit worthiness required to get a loan. This will allow you to refinance at a much lower interest rate saving you a considerable amount of money. You will also qualify easier for car loans, and other credit purchases.
When you join our Rent-To-Own Program, you must agree (if required) to be put on a Credit Rebuilding Program. This normally has a setup cost of $300, and a monthly cost of $99/month. However, we pay for these costs at closing! Yes, FREE Credit Cleanup for Purchasers.
How Long Is The Rent-To-Own period?
Most of our rental periods are for 1-2 years, although, depending on your circumstances, we can go for much longer, possibly 1-5 years. Each property is treated individually and we try to accommodate your own situation. However, you may buy at any time within the length of the agreement. You do not have to wait till the end of the agreement.
What about improvements that I do to the property?
Once you decide to ‘Rent to Own’ a property from us, every improvement you make to the property (painting, carpet, additions, new fence, new deck, landscaping, etc.), will help improve the value of the property. When you decide to buy, it is all yours – and you keep all the work and equity you provided. We encourage you to customize and personalize your home!
This increased value will not only benefit you as a tenant, but the value of the property will increase, allowing you to qualify for an eventual loan much easier. The set purchase price in our contract - will not change, regardless of how much you upgrade the home! You must notify us when you do any 'major work'
On some homes, we have a 'Work for Equity' program. In this program, you can put down less option money if you agree to 'clean up' and upgrade the home.
Who pays the property taxes?
You will not be required to pay property taxes during your rental period. The Owners pay all the property taxes before your purchase.
Who pays the insurance?
The Owners pay the insurance to cover the building structure. You must get your own renters policy for contents. This is usually about $30-$40 per month.
Who pays the Utilities?
You, the Tenant-Buyer, must pay for all utilities.
Who pays the Maintenance and Repairs?
You, the Tenant-Buyer, are responsible for All maintenance and damages caused, whether caused by you, or not, of up to $1,000 per occurrence. This may vary depending on the program you choose. Remember, that you are a 'Home Owner In Training', so you must treat the home with respect.
What if there are no properties available in the area we want to live in?
On our website is a emailing list. Simply insert your email and properly location required, and we will search our upcoming properties, and notify you first. Alternatively, you can CHOOSE ANY HOME ON MLS that you like, and that our Mortgage Broker says you can afford.
What if we still can't qualify for a bank loan by the end of our 1 or 2 year option period?
If you have enrolled in one of the ‘Rent To Own’ credit rebuilding programs, and you pay your rent on time every month, you should have no problem to qualify for a loan. We will have known this BEFORE we let you move in to the home.
But if you still don’t qualify, and you are current in your rent payments, it may be possible to negotiate to extend the ‘Rent To Own’ Program for another year or two. This will increase your rental credits even more, and build up even more equity in your home. Then you should qualify. This would be negioatble between you and the owner of the property. However, you should negotiate all of these conditions before agreeing on the lease/option agreement, as it will be more difficult to negotiate this later.
If you do not pay your rent on time, and do not follow the 'Credit Cleanup' instructions from our Credit Cleanup Specialists, and do not make an active effort to help you purchase the property, then it will be very difficult for you to qualify for a mortgage, and your efforts and rent credits will be lost. So it is very import for you to be current and use common sense.
What If I Decide Later That I Don't Want The House Anymore, Or My Job Relocates Me?
On our Rent-To-Own Program, you have the exclusive right to Purchase the Home. If you decide at anytime, that you no longer want to rent that home, or you have to move away, for any reason, you can just give proper notice, according to your lease, to the Owner and you can move as you please. You will, however, loose all of your Rent Credits and Option Consideration fees. These become non-refundable if you do not buy the Home. You may also loose any equity or improvements that you have gotten in the Home.
You can always consider to move in to any one of our other of our Rent-To-Own Homes, and we would consider for you to keep some or all of these credits to carry forward to your next home.
I am a first time homeowner, and I am still nervous. How can you assure me that I am doing the right thing?
It does not hurt to sign up to the property listing bulletin. Its FREE. You can just browse the properties while you decide what is best for you. There is always no obligation what so ever! We will always guide you through the entire process. Why not just go and look at some properties that interest you? It can’t hurt!. It is not that difficult to own property through our ‘Rent To Own’ Program!
When you think the time is right, contact us, and we will set up an appointment with our 'Rent To Own' mortgage broker, and he will give you a complete, comprehensive, financial analysis and Home projection analysis. This includes a Rent To Own ownership probability score, and all your credit scores, along with a realist plan to rebuild them if necessary.
One or two years from now, you can own a own home with some equity, and you may even have mortgage payments that are less than rent! You will be HAPPY you did it!!! You will be SAD if you didn't.
What Are The Advantages?
- You can 'Own' a Home NOW! You do not need to wait years to fix your credit. Live in the home while we fix your credit.
- We work with you from start to closing, to ensure that you stay on track to get you Permanently Financed.
- By owing a Home, you are building WEALTH!
Remember that At retirement age, the only wealth that most people have in Canada - is their Home!
What Are The Disadvantages?
If you do not make your monthly payments, you will loose all of your monthly payments, and you will loose all of your Option Consideration payment you put up. Just is true just like if you had a Mortgage with a bank. If you don’t pay your Mortgage payment with the bank, you will loose your Down Payment and all your monthly payments, and you will face eviction.
How Long Does The Process Take?
If we have the home you like, and you approve, it may only take 1-2 weeks to move you in, possibly less.
I'm interested in the program. What do I need to do next?
1) Sign up to our FREE email notification Bulletin to get available homes emailed to you as we get them.
2) Fill out a quick "2 Minute Application" to let us know what area you are looking for.
3) Select properties in the area of your choice from our website catalog, or choose ANY Home on MLS. Each property has a mini website, so that you can familiarize yourself with the surrounding areas, maps, and interesting statistics.
4) When you settle on a property that you like, fill out the "I Want The Home" form and get approved. Some people like to get Pre-Approved by filling in the "I Want The Home" application first, even before they find a property. That way, when they find the property they like, it’s theirs! There is no cost to do this! It is like Getting Pre-Qualified.
5) We will sit down with you, show you your credit report, tell you what must be done, give you a 'Home Ownership Map', and review your options.
6) Once you are approved and happy with the agreements, we collect your option consideration money, and you sign the Options agreement and the Lease.
7) You get the keys!!!
8) Our associates help you during your Lease/Option period to rebuild your credit and tell you what you need to do to get a mortgage in 1-2 years. We are in constant touch with you to ensure that you will meet your objectives.
Do you have a Referral Program?
Yes we do! If you refer anyone to us, and you are an existing client, and they end up moving in to any of our Rent-To-Own Homes, you will be given a Referral Fee of $500! We must know your referral in advance of move in.
Once you are approved, we can get you in your Dream Home Fast!
Do it now!
- Because if you wait longer,
more rent
money is going down the drain!
GO AHEAD, CLICK HERE TO GET STARTED
