- What does Rent to Own mean?
- What are some benefits of working with Rent to Own Barrie?
- Who can qualify for a Rent to Own?
- How long does a rent to own agreement last for?
- What is an Option Fee?
- What are Rent Credits?
- Can I do renovations or upgrades to the home?
- What if my credit is too bad to qualify for a mortgage?
- Why are my monthly Rent to Own payments higher than my current rent payments?
- What is the minimum deposit I need?
- Can I make more than the minimum $10,000 option fee?
- What if I am self-employed?
- Do I have to wait till the end of my lease period?
- What if I don’t qualify after the lease period?
- How is it different than renting?
- If accepted into your program, is there a fee?
- Why does your Rent-to-Own program work?
- What are the advantages of Rent-to-Own?
- What are some of the reasons I might be declined for your program?
- Will you help me fix my credit so I can get a mortgage at the end of the term?
- Who chooses the Rent-to-Own homes?
- Who will own the house while I Rent-to-Own?
- What kind of agreements do you have in place to protect me?
- What is an Option Agreement?
- What is an Occupancy Agreement?
- Do we need a lawyer?
- Who pays for maintenance?
What does Rent to Own mean?
Rent-to-Own is renting with the option to buy. That's it! You simply lease the home from us and then purchase it at a later predetermined date at a set price. This will provide you enough time to clean up past credit problems.
Rent to Own means that you are renting a property but you have the option to buy the property at the end of a predetermined length of time called the lease period. The length of time can vary from person to person but usually it is 1-3 years depending on your situation. After the predetermined time you then have the option to buy the property at a price that was already agreed upon when you first moved in. If all goes well and you do decided to buy the property, you will then receive full ownership of the property.
What are some benefits of working with Rent to Own Barrie?
Stop paying wasted rent money to a landlord.
Get started in home ownership, and start building up equity today!
Set your future purchase price from the start so you know exactly what your payment
will be at the end of the lease period
Lower deposit required
Help build up a larger down payment through 'rent credits'
No bank qualifying
Less hassle than qualifying through a bank and Less Paperwork
Great way for self-employed people, and business owners to get started on home
ownership without satisfying banks on your proof of income.
Able to qualify even if you have bad credit
Get expert help rebuilding your credit to prepare you for bank qualifying
Who can qualify for a Rent to Own?
Many people think they can’t qualify for a rent to own program but this isn’t the case. Our rent to own system is a great option for many different kinds of people in a variety of situations, such as:
New Immigrants who have good jobs but still need to build up sufficient credit history
People who are lacking a full down payment to qualify with a bank but would like to start building equity while they continue to save
Self-employed or new business owners looking to build up enough history with their business to be able to qualify with a bank
People with “bruised” credit due to an unforseen life event, such as a divorce, and they need some time to rebuild their credit up to a good standing
Current home owners who are relocating to another city due to work and cannot qualify to buy another property until their current home is sold Also people who have gone through a bankruptcy that have good incomes and are committed to making considerable changes to change their current situation.
How long does a rent to own agreement last for?
Typically, most people qualify for their own financing within a period of 12 to 36 months. This c.an vary depending on your current credit status and down payment needs.
What is an Option Fee?
When you enter into a Rent to Own Agreement, you will first have to pay what is called an “Option Fee”. An Option fee gives you the right to buy the property at a pre-determined price at any time during the lease period. The best part is that if you do decide to purchase the house then that option fee money will be credited towards the purchase price of the home, this will reduce your down payment when you take out your own mortgage with a bank. The minimum Option Fee that we will accept is $10,000. You can certainly pay more than the minimum amount, which will reduce your monthly payments and potentially help you qualify faster.
What are Rent Credits?
Rent Credits are the amount of your rent that will go towards building up the rest of your down payment need when you go to the bank to qualify on your own. These rent credits are like a form of forced savings, helping to bring you closer to becoming a home owner. Over the life of your lease you will continue to build up rent credits which will help to reduce your final purchase price.
Can I do renovations or upgrades to the home?
Yes, in fact we encourage people to treat this home as if it were their own (because one day it will be). However, we do require that all work done to the home be performed by a qualified contractor, and that before any work is done you discuss it with us first.
What if my credit is too bad to qualify for a mortgage?
To get started in a rent to own property having good credit is not a requirement. Here at rent to own St Catharines we have team of credit repair specialist that will work with you from the very beginning to determine where your credit rating currently stands, what steps need to be taken to bring your credit up to a standard that will make banks happy to deal with you, and how long it will take to get you there.
After your initial meeting with our specialist you will be given a step-by-step guide that you will be required to follow in order to get your credit up to bank standards. Furthermore, every few months our credit specialist will meet up with you to make sure you are on track and make any adjustments necessary.
Our main goal here at Rent to Own St Catharines is to do EVERYTHING in our ability to help you realize your dream of Home ownership.
Why are my monthly Rent to Own payments higher than my current rent payments?
For most people the monthly payments won’t be any higher. However since your monthly payment will now cover all the other costs associated with home ownership it can appear higher. Some things your new payments will include are: mortgage interest, principle, taxes, insurance and rent credits which are helping you to save for your down payment at the time of purchase.
What is the minimum deposit I need?
We require all of our buyers to provide a minimum deposit of $10,000. This deposit shows us that you are serious about being a home owner. The good news is that this deposit will be credited towards your future down payment.
Can I make more than the minimum $10,000 option fee?
Yes, you can certainly put down a larger option fee. If you do put down a larger option fee, there are a few options we can give you:
1) You can lower your monthly payments.
2) You can keep your monthly payments the same which means you will have a larger deposit amount built up for when you decide to buy.
What if I am self-employed?
This isn’t a problem at all. Just because you are self-employed doesn’t mean that you can’t own your own home. However there are some specific steps you need to take in order to qualify, but not to worry, with our team of credit specialists helping you every step of the way, you won’t have a problem in qualifying to buy your own home.
Do I have to wait till the end of my lease period?
No, in fact, a lot of buyers end up purchasing their home before the lease period is up? Together with the help of our qualified mortgage brokers and credit repair specialists, you may achieve your dream of home ownership sooner then you expected.
What if I don’t qualify after the lease period?
Remember that our main goal is to help you to eventually qualify for a mortgage, and purchase the house from us so that you are the owner. We have a very high success rate, however, in the event that you do NOT qualify for the mortgage when the lease period expires, we can look at extending your lease period for an additional year to help give you that final push needed to repair your credit and qualify for a mortgage.
How is it different than renting?
You will have interest in the property in the form of an Option to Purchase
Agreement You will need to pay some Initial Option Money and most likely
make further monthly option payments. In return, you will receive credit in that
amount towards your down payment when you purchase the home.
If accepted into your program, is there a fee?
If you are accepted into the program, we require a non-refundable application
fee of $500 plus appropriate tax once we are about to start the contracts.
Prepare to spend about $1,000 to pay for appraisal and Home Inspection
Why does your Rent-to-Own program work?
We have developed a Rent-to-Own qualification program that follows strict
success guidelines we've adapted over many years.
Before we even start to talk about money; we ensure that this program is the
best option for you, and that we have the most effective strategy to help you:
- fix your credit,
- build equity quick/~ and
- qualify for a mortgage within a few years.
What are the advantages of Rent-to-Own?
Our clients enjoy being able to accelerate their journey to home ownership!
They do this through:
- Monthly Credits: You will earn monthly credits towards your down
Each and every month you are saving money towards the
possible purchase of your home. This helps you to build equity in your
home faster than with a traditional mortgage - no more wasting all your
money on rent!
- Home Appreciation: Any improvements that you make on your home
will increase the value above and beyond your final price. This increase in the home's value is yours to keep because your price is locked in.
- Move Into Your Home Now: Instead of waiting until you can qualify for a mortgage, you get to move into your home now and qualify with the bank later.
- Test Drive: Because you don't officially own the home during the lease,
you get to test drive the home to make sure that it's just right for you.
- Your Credit Score: During the. lease portion of this program, we will work with you to improve your credit score so that you can obtain financing when you exercise your purchase option.
What are some of the reasons I might be declined for your program?
There are a number of reasons prospective Rent- To-Own tenants are declined.
- Lack of adequate Initial Option Money. Our program requires more Initial Option Money than other companies may ask for. Our reasons for this are We want our tenants to become homeowners! Coming in with more Initial Option Money helps build a foundation so there will be a greater level of success to qualify for a mortgage from a bank after our program expires.
- Your time on the job is too short We are looking for applicants with more stable employment; minimum of at least 6 months on the job and a
combined family income of $70,000 per year.
- Your income is shy of our minimum requirement for a house of that amount. A good guide is 4 times your income and that will give you some idea how much home you would be able to afford. i.e. $100,000 (total combined income) X 4 =$400,000.
Will you help me fix my credit so I can get a mortgage at the end of the term?
We will assign a credit counsellor or mortgage broker to you, who will guide you
throughout the Rent-to-Own term. They will ensure that you are on the right
track in repairing your finances and credit so that they can match you up with a
lender down the road.
Who chooses the Rent-to-Own homes?
Once you are qualified for our Rent-to-Own program, you can shop for your own home! You can work with one of our realtors or a realtor of your choice to find the home you want. Of course, we want to avoid areas where properties are not appreciating. We want you to be in a good neighbourhood with good schools and where property values steadily increase. We are a company that invests in you as much as we invest in the home itself.
Who will own the house while I Rent-to-Own?
On your journey towards home ownership, one of our investors will purchase
your Rent-to-Own home while you repair your credit, grow your down payment
and become a home owner sooner.
What kind of agreements do you have in place to protect me?
We use an Occupancy Agreement and Option Agreement that have been drafted
by real estate specific legal professionals. These agreements have been
modified over the years in order to protect your option payment, monthly option
credits and right to purchase the home.
What is an Option Agreement?
The Option Agreement is a document that outlines your exclusive right to
purchase your Rent- To-Own home. It will include your initial option payment,
monthly option credits and future purchase price in the agreement
What is an Occupancy Agreement?
The Occupancy Agreement is like a lease; it states the responsibilities of the
occupant and the owner. It will include the length of the term/ the monthly
payment as well all the details regarding use and maintenance of the home.
Some Rent- To-Own programs refer to it simply, as the Lease.
Do we need a lawyer?
The Agreements have been drafted by real estate specific legal professionals and
have been modified for years in order to protect your option payment monthly
option credits and rights to purchase the home.
We DO recommend that you have your lawyer take a look at all agreements/ but
your lawyer does not need to create new documents.
Who pays for maintenance?
You will be responsible for any repairs and maintenance of the property, just like
any other home owner would. This is a huge responsibility and you will benefit
from any improvements that may increase the value of the home once you
exercise the option. Please remember that all homes need regular ongoing
maintenance/ so you should budget accordingly when considering the monthly
payments. When you first picked this home/ you would have called a home
inspector and know exactly what is required for that home in advance