Rent To Own Program
Saving enough money for a down payment while paying rent or trying to secure a mortgage with a low paying job or bad credit history are only a few of the obstacles that make buying a home seem so difficult.
Wouldn’t it be great if some of these monthly payments could go towards the actual purchase of your home? Now they can!
- If you are tired of making monthly rental payments
- Don’t want to keep wasting your money in rent
- Feel you are ready to start building something to show for
- And you are considering Home Ownership seriously
then our Rent To Own Program is the answer for you.
What Is “Rent To Own” Or “Lease To Own” In A Nutshell?
Our unique Rent to Own Program allows you to lease and occupy a home while at the same time you build equity towards the purchase of this home.
- The selling price for a future time is determined now Warranted!
- You put a small down payment towards the purchase of the house, usually around 3% to 5%
- The monthly payments have two components: Monthly rent + Option credit. The Option Credit goes towards the purchase of the house
- The initial down payment and the Option Credit accumulated over the leasing period are credited towards the purchase of the house.
- On the date agreed on the Option to Purchase contract, usually 1 to 3 years, you will be able to qualify for a mortgage. Once the mortgage has been approved and you decide to exercise your option to purchase your home, the title is transferred to you.
This way, you enjoy the pricing and value of ownership today even though you won’t purchase the home until later.
This program truly makes home ownership a possibility for anyone who has something to work towards the down payment and can afford reasonable monthly payments.
Rent To Own Is As Easy As 1, 2, 3
Rent to Own a home is similar to leasing to own a vehicle:
- Today we determine a purchase price for the home based on the term of the agreement as well as a small initial down payment.
- We agree upon a monthly payment with two components: a rent portion and the option credit amount that goes towards the purchase of your home.
- Together we determine the time period of when you would be able to purchase this home with your own financing and exercise your option.
From day 1 you move into your dream home while you work towards exercising your option.
In the meantime, we begin to work on whatever challenges you have that currently do not allow you to purchase a house: whether it is your credit or the lack of a larger down payment so the home is completely yours in the future.
You may now wonder…
What Are The Benefits Of Your Rent To Own Program?
Here you have some reasons why you should consider Lease to Own:
- Lease to Own allows you get out of a not so nice “rental property” and move into a place you can proudly call home right away.
- At the same time you start saving enough money for your mortgage down payment with the goal to own this home over a predetermined period of time.
- You don't need to wait years and years to improve your credit history before you can qualify for a mortgage and move to a nice home.
- Rent payments can be fixed for the life of the agreement, so you have a clear plan towards owning your home.
- Instead of just paying rent you are working towards the purchase of the home you are living in. You start building equity in your home immediately.
- You don’t need a large standard down payment to get into your dream home right away. A small amount is enough for having you moving into your new home.
- We create a plan with you to accumulate the balance of the down payment.
- The future option price is locked in so you will benefit from any property appreciation above the option price exercised.
- Your new mortgage is generally easier to obtain when you exercise your option, especially when the property value is higher than the option price.
- Plus, you also know, the work you do in your home will not be wasted when the lease is over.
- Best of all, through this program, while you are living in your home of the future, you are also building equity, improving your credit and putting yourself in a position where home ownership is not only possible but easy.
Can You Give Me An Example?
The easiest way to understand it is going through one case study.
Every house-buyer situation is different but for the sake of numbers let’s use this example: a 3-bedroom and 2-bathroom home; with a basement, double garage and fenced yard.
Let’s say that based on your current financial situation we have agreed upon a 3 year term:
Rent To Own - 3 Year Case Study
- The current market price of the property is $300,000
- Let’s assume that based on your current situation and the particulars of the property we make a plan with you for three years. Then we agree to a future purchase price of $328,000 which is approximate 3% appreciation per year.
- You have saved so far $10,000 to put down and we use this as your first initial down payment.
- The target monthly rent for this house is $1,600 plus you want to save as much as possible for the future down payment so you decide to put another $500. So your monthly payment is $2,100. These additional $500 are going to be credited towards the purchase price of the house.
- During the three years we have created a plan with our mortgage broker and credit consultants to assure you will be able to qualify for a mortgage.
- At the end of the three years term you have been accumulated $28,000 (your initial $10,000 plus $18,000 from your option monthly payments of $500)
- At this point you will have accumulated 3 years of good credit history which will allow you to qualify for a CMHC mortgage with only 5 to 10% down payment and then get the title of your home transferred to you!
- Starting from there your approximate monthly costs of ownership including mortgage payment, taxes, insurance would be $1,775
You want to see how this look in Summary? Here you go...
Financial Summary - 3 Year Case Study
$ 1,600 Monthly Rent Component
$ 500 Monthly Option Credit to purchase
$ 2,100 Total Monthly Payment
Accumulated Down Payment
$ 10,000 Initial down payment
$ 18,000 Option credit accumulated over the term ($500x36 months)
$ 28,000 Total down payment paid over the term
Purchase Price balance at the end of the term
$328,000 Agreed purchase price at the end of the 3 year term
($ 28,000) Minus down payment accumulated over the term
$300,000 Balance owing, this amount will be financed with a mortgage
Expenses moving forward
After refinancing your approximately house cost will be approximately $1,775
$1,520 Monthly mortgage Payment (35 year amortization at 5% interest rate)
$ 180 approximate monthly tax payment
$ 75 approximate monthly Insurance payment
$1,775 Total monthly house payments
By now you may be thinking…
This seems very complicated, it may take forever… It is just the opposite! The whole process is faster than you can imagine…
Because there are no banks involved at this point we don’t need to go through the bureaucratic process they normally follow. After you submit your application we normally give you an answer within 24 hours.
Once you decide to go ahead we just have a couple of documents to sign and you can be moving to your new home within days!
Remember, regardless of whatever kept you from buying a home in the past, don't let it stop you now!
You're talking to the owner direct, not a realtor. We're free to work it out between ourselves without banks dictating the rules.