HOW THE RENT-TO-OWN
PROGRAM WORKS
Rent-to-own, also known as a 'lease option', is probably the easiest
and simplest way of all methods used to purchase an item as well as
being the lowest risk way to get involved in owning your own home.
It offers a terrific opportunity for people with credit challenges to own
their own home now as opposed to an unknown future time.
What is a Lease Option?
Basically it's the same technique used as when you lease a new
car from a car dealership. Not that long ago, the only way you
could buy a car was to pay cash or borrow the money for it from the
car company or a bank. Today, most car dealerships let you lease
the car of your choice by putting down a small down payment
initially and then every month you make lease payments of an
amount calculated by a formula. At the end of the lease term, the
car lessee has the option to buy the car for a predetermined option
price. Or, the lessee can give the car back to the dealership with no
further obligation, providing it is in good shape and not damaged,
and then lease a new car in the same manner. It's a win-win
situation and we do the same thing with real estate!
Is a Lease Option Right for You?
One of the biggest challenges we find with using lease options is that
buyers, sellers, and real estate agents don't understand them. The
reality is, lease options offer a great way for people young and old,
with good credit or bad credit, with a large down payment or small
down payment to buy a home.
Bank appraisal of home today:
Sell price to you in 36 Months:
$200,000
$231,525
The Credit Back/Equity as shown in the example above is
YOUR down payment! (10% of purchase price)
In other words: You pay $11,000 now, $1700 per month for 3 years,
and in 3 years we will give you back a note for $23,240 (10%) to use
for a down payment and legal fees to purchase the property for the
price of $231,525
Toll-Free: 1-855-768-2696 | FAX: 1-855-564-4153 | Email: [email protected] | WEBSITE: www.hometerest.com
Bonus: THE CURRENT VALUE FOR THIS PROPERTY IS
$200,000. BUT IF IT IS WORTH MORE THAN $231,525 IN 3
YEARS, THIS EXTRA EQUITY IS YOURS!!!
HOW DOES RENT TO OWN WORKS
Rent Credits: Each month a chunk of your rent could get credited toward the possible purchase of your home, allowing you to build equity in your
home faster than with a traditional mortgage - no more wasting all of your money on rent.
Improving Your Property: Because you may own this property soon, any improvements you do that
increase the value of the property may help you build more equity for yourself.
No Banks: You don't have to qualify with a lender today. You can move in without bank approval.
Own Your Own Home: You enjoy the benefits of owning your home before you ever buy it!
Flexibility: You have total flexibility: You have the option to buy your home, not the obligation!
Your Credit: You are creating a strong credit reference while you are renting to own.
How does the Program Benefit You?
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You will live in the home of your choice right now while working on becoming eligible for financing.
$500 application fee, 100% of the security deposit and 20% of lease payments are all credit back to you at the end of your term.
You get the chance to fix your credit within 12-60 months so you can qualify for a mortgage.
We always aim to ensure that your down payment plus monthly credits will accumulate to be above, or very close to 10% of your end
purchase price so you can get a 90% mortgage at the end of the term.
We help you reduce your debt by 50% and get you out of debt in 1-5 years.
Qualifying for the program is easy. All that is required to join the program is verifiable income/ verifiable cash to support the monthly lease
payments and (if required) monthly option credit.
No one else can buy the property during the rent-to-own period.
You can add value to the home by renovating, decorating and/or painting which you benefit from.
You are buying a starter home that you and most people can afford which is also recession proof and easy to rent out.
You have a potential to capture appreciation from over above market appreciation (market boom).
You get to experience homeownership without risking your credit.
Toll-Free: 1-855-768-2696 | FAX: 1-855-564-4153 | Email: [email protected] | WEBSITE: www.hometerest.com
Rent To Own – FAQ’S
Is rent to own legal?
Yes!
How much of a down payment is required?
You are required to pay a non-refundable “option sum” (security deposit) between 5%-7% of the purchase price depending on your credit score. The
larger your down payment the lower your monthly lease payment will be. If you are unable to come up with the full amount, you may be permitted to
pay it over a prearranged period of time. 100% of the deposit is credited towards the purchase price of the home. We also have home ownership
saving plan for committed individual with little or no down payment. Email us at [email protected] for more detail.
Do you offer down payment Assistance Programs?
Yes we do. If you are a bit short on down payment but have strong income, we can set up a monthly payment plan to make payments towards your
down payment.
Why do I need a down payment if I am only renting?
Simply because when you get the title and a mortgage for the property, you will NEED a down payment. The initial down payment and the monthly
credits you accumulate will go back to you so that you can (ideally) have a 10% down payment when it is time to take over.
How long is the lease term?
560 or less: three year term
560 to 620: two year term
620 and up: one year term
What type of legal agreements is involved?
A rent to own transaction is typically governed by these legal agreements:
1. Lease Agreement – a typical rental agreement outlining the conditions of the rental term and lease payments.
2. Occupancy Agreement – outlines the responsibilities of the tenant and owner.
3. Option to Purchase – outlines the final purchase price and closing details (typically 36 months from start of rental term).
4. Utilities Agreement – All utilities for the home are set-up under your name.
5. Home Repair Contract – If after the inspection and issue is found and you would like to proceed with purchase, this document outlines any repair
necessary.
As with any legal transaction, we encourage you to review the documents with your lawyer.
Toll-Free: 1-855-768-2696 | FAX: 1-855-564-4153 | Email: [email protected] | WEBSITE: www.hometerest.com
What happens if I decide not to purchase the property at the end of the lease?
You can assign it to another qualified tenant-buyer or you may exercise your right not to purchase the property at the end of the lease. But you will
not be reimbursed the deposit that was to be used as a down payment towards the purchase of the home. If you decide to break the lease before the
option term is complete you also lose your deposit. However, you can simply walk away with no legal liability.
What happens if I default on my payments?
You must understand that we are responsible to the lending institution, the city, and the insurance company etc. to meet our monthly payments.
Should you default and fail to meet your monthly obligations we will have no choice but to commence legal proceedings to recover our costs. If we
are unable to resolve the matter in a quick fashion you will be served an eviction notice. You will forfeit any credits you have accumulated and lose
your right to purchase the property. We will only work with people that understand this clearly.
Is the prospective buyer allowed to renovate or make improvements to the home?
Yes, you are allowed to improve your home; however the landlord/seller requires advance notice and must give their approval.
Who is responsible for maintenance and repairs of the home?
You are responsible for any repairs under $500 per month and any improvements made on the home.
Who pays for insurance, maintenance fees and property taxes?
Your lease payments include maintenance fees (if leasing a condominium), property taxes, and building insurance fees.
Can I purchase the property before the end of the lease term?
Yes! You can purchase the property at anytime during the lease term, providing all conditions in the lease agreement are met.
Is the purchase price of the property guaranteed?
Yes, the purchase price is guaranteed over the term of the agreement. The lease is based on a two-year term and the tenant/buyer has the right to
extend or renew for up to four more years.
Who buys my house? Who am I leasing my house from?
The house is purchased on your behalf by lenders or by individuals interested in investing in real estate. We have a network of investors that we work
with.
What if my credit is pretty bad today?
That’s fine. If your credit is in really rough shape, we can work with a Credit Specialist throughout the Rent to own term to get you in tip top shape.
Toll-Free: 1-855-768-2696 | FAX: 1-855-564-4153 | Email: [email protected] | WEBSITE: www.hometerest.com
Why is the down payment non-refundable?
The property is purchased on your behalf by investors. These investors put themselves in financial risk – remember
they are giving you money that banks won’t! If you back out, they are left with a property they didn’t choose. The
non-refundable deposit means that they have something to show for the risk they took on you.
Please note this is NOT a guarantee that you will be able to qualify by the end of the term. The credit counselor will
do all he can to guide and advice, but it is still up to you to follow the advice and take the necessary steps to turn
your credit around.
What if I still can’t get financing at the end of the 3 years?
All applicants are pre-qualified to ensure that they are able to get financing at the end of the 3 years, however, if
you fail to improve your credit you will be unable to purchase the property and you will not lose all of your deposit.
We can extend the term to work with you to ensure that you own a home soon provided you are serious about
becoming a homeowner. During the three year lease term, the tenant works with a credit specialist or mortgage
broker to ensure they are able to qualify for a mortgage at the end of the three year term.
What happens if I’ve had a past bankruptcy or credit proposal, can I still qualify?
It depends. If the Bankruptcy or Credit Proposal is discharged you can still qualify for this program as long as you have had no late payments after
the bankruptcy. You need to be discharged before you can qualify and will need to provide copies of the discharge papers with your application.
If you have had double bankruptcies (for example, 8 years ago and then 2 years ago) you will not qualify for the program unless you have a 15-20%
down payment as the banks will require you to have at least 20-25% down when it is time for you to buy.
Why should I have to have a credit check done if I’m not applying for a mortgage?
It’s not about you applying for a mortgage, but rather to see what your starting point is, and what needs to be done from now until you take
possession to make sure you can qualify for a mortgage. Other good reasons to check your credit include: i) it should be reviewed for accuracy every
now and then, and ii) someone heading for Bankruptcy is not a good Rent to Own client. This will also help us determine how long of a period you
should have.
Why we ask you to pull your own credit? (Equifax)
All applicants are required to provide Credit report with Score along with the application form so there will be no need to pull your credit and
lowering your score. We will only use the report to assess how long your rent-to-own term will require by consulting our mortgage agent/ broker
(note: make sure you order your Credit report with Score™, not your Credit Report). Having the applicant pull their own bureau is the first step in
any credit repair process; after all, if the applicant doesn’t know what’s on their bureau, they cannot take the necessary steps to fix it.
Toll-Free: 1-855-768-2696 | FAX: 1-855-564-4153 | Email: [email protected] | WEBSITE: www.hometerest.com
Once I have been approved and found my dream home how soon can I move in?
You can move in as soon as we receive your initial deposit plus first and last month’s payments.
What will the purchase price be at the end of the term?
We believe in transparent business. We will take today’s purchase price of the home and increase the property value by a conservative appreciation
rate for the area you are buying in each year. This varies from one city to another, but our goal is to have you purchase the house for slightly below
market value when it is time for you to buy so you have some built-in equity when you move in.
You will know your end purchase price before you ever sign any agreements and move into the home as this is locked in for you when you enter the
Rent to Own Agreement. No need to wonder during the term how much you will be purchasing the house for in the future.
Typical annual appreciation rates across southern Ontario range from 3% to 6% in most areas. If the property increases in value beyond the agreed
amount, either through your improvements or market changes, that is to your benefit and your purchase price does not change.
What is the initial cost to start the program?
Once you have completed the first application, one of our specialists will contact you. The specialist will discuss your application with you and will
advise you if it is profitable for you to go ahead and fill the second application.
We charge a fee of $500 for our second application to ensure that you are serious and that we are not putting our time and efforts towards people who
are not ready to take action. It takes time to get these opportunities set up and we cannot afford to be taking valuable time away from our serious
clients. There is no guarantee that this application will get you into a property. That will be determined after reviewing a fully completed second
application.
The $500 application fee (which is refundable to you if you do not qualify for the program). And if you are qualified for the program, the $500 will
be credit back toward your deposit).
Toll-Free: 1-855-768-2696 | FAX: 1-855-564-4153 | Email: [email protected] | WEBSITE: www.hometerest.com
There are only 6 steps that you need to take, in order to get into your own home. They are:
1.
2.
3.
4.
5.
We get an application from you and then, over the phone, explain the entire program to you and look into what your unique situation is.
We then meet face-to-face to go over the various details and sign documents to work together with our Rent 2 Own Program.
We then get you a friendly realtor from our Team, to help you pick out the home of your Dreams.
We then buy you the Home!
You will then "rent to own" the home from us, for 2-3 years, all the while that we continue to help you improve your credit score and quality
for a mortgage.
6. After the 2-3 year’s term, you buy the home from us and the home is all yours!
If you truly want to break out of the renters' cycle, and start investing in you and your future - then all you need to do is take a few minutes and give
me a call at Toll Free 1-855-768-2696. We'll set up a time to discuss your particular circumstances and what you want to do, come up with the best
game plan to get you into a new home, quickly, and then start looking for your future home.
I can't stress enough that there is really only one thing standing in the way of you and home ownership - YOU! It's that simple. You can own a home,
if you want to.
So take a few minutes and give me a call - you have nothing to lose and everything to gain.
Toll-Free: 1-855-768-2696 | FAX: 1-855-564-4153 | Email: [email protected] | WEBSITE: www.hometerest.com
If you haven't applied yet, please take action now!
If you have filled out the Application, you can begin ordering your Equifax Credit Report and Score we will only use the
report to assess how long your Rent-to-Own term will require by consulting our mortgage agent/ broker.
Email it to [email protected] or by fax: 1-855-564-4153
Thank you for your interest in our home ownership program.
Sincerely,
Alfi Soon, B.Arch.Sc.
Mortgage Agent - M11001614
Cell: 416-317-6781
Fax: 1-855-564-4153
Toll-Free: 1-855-768-2696
Work Email 1: [email protected]
Work Email 2: [email protected]
Website 1: http://www.mortgagealliance.com/alfisoon
Website 2: www.mainstreetmortgages.ca
Toll-Free: 1-855-768-2696 | FAX: 1-855-564-4153 | Email: [email protected] | WEBSITE: www.hometerest.com