Rent-To-Own FAQ

Rent to own home Frequently Asked Questions

RENT TO OWN FAQ

 

  • What is a rent to own? 
    Simply put, rent to own is renting with the option to buy. You immediately move in your house and Improve your Credit and Save Down payment while already living in your Dream Home 

  • How is it different than renting? 
    You are considered the “owner” when you move in and have the freedom to decorate the house to make it your own.  

 

  • Who is Rent-to-Own for? 
    If you have Poor Credit ? Low Down Payment ? New To Canada? Self Employed? Tax Arrears? Facing Power of Sale? Facing Foreclosure? Bankruptcy/Consumer Proposal Discharged? Then this program is for you. It can also be for people who cannot refinance their current homes. 

 

 

  • What are the Requirements? 
    4 % Down payment , Good Income(Job / Business) , Strong Desire to Own Home 

 

 

  • How does Rent-to-Own program work? 

  1. Submit the Application 

  2. Choose almost any home on the market based on your Budget. 

  3. Move into Your home 

  4. Follow the Plan with Commitment 

  

  • What are the advantages of Rent to Own? 

  1. Initial Down payment Credit 

  2. Credit in Monthly Rent 

  3. Increase in Value of Your Home (Equity Build Up) 

 

  • I have bad credit, will I qualify? 
    We specialize in working with people who have blemished credit. We assess whether your financial circumstances can be repaired to ensure that you could qualify for a conventional mortgage when you are ready to purchase.  Complete our RTO Application and we will let you know right away if you qualify. 

 

  • Will we be given a budget?  
    Yes, this approval amount is calculated based on your income level and your budget. 

     

  • Are the monthly payments higher than rent? 
    The monthly payments are higher to ensure you complete the lease term with a minimum of 10% down which is applied to the down payment on the option to purchase but also used to cover the closing costs that are association with the option to purchase (legal, land transfer etc.).  Yes, you pay more now but the goal is to eliminate any surprise charges at the end of the term. 

 

  • Will my monthly payments change throughout the Rent-to-Own term? 
    No, monthly payments are fixed for the duration of the program. 

 

  • Do I get to choose my own home? 
    You are involved in the entire process and will work with one of our real estate professionals to find the home you want. 

 

  • When we choose a home, is it just about price and value of the home?  
    Price and value are important but we look at many other factors including positive appreciation (after all, it is an investment for you), location, amenities etc. 

 

  • Who owns the house while I Rent-to-Own? 
    One of our investors will purchase your Lease-to-Own home while you repair your credit and build your down payment. 

 

  • Do I need a down payment? 
    Yes, for every rent-to-own we must have an initial minimum down payment of 3.5-4% on properties over $300,000. The more you have to put down initially, the lower your monthly payments will be. 

 

  • How much down payment will I have at the end of the Rent-to-Own term? 
    Our program is developed to ensure that all of our clients have built up at least 10% down payment through monthly option premiums, incentive credits and initial down.  This will be your 8% down plus 2% for your closing costs at the end of the Rent-to-Own program. 

 

  • How do you determine the buyback price of the house? 
    We use an average appreciation value based on historic market values in the area the house is located to calculate the Future Purchase Price.  We are fair and compare apples to apples. 

     

 

  • What is the minimum Rent-to-Own term? 
    The Rent-to-Own term can be two to three years depending on your qualifications in the program.  We have had instances where we have had to put five year terms in place.  Each situation is dealt with on an individual basis. 

 

  • What kind of agreements are in place to protect me? 
    We use an Lease Agreement and Option to Purchase Agreement that have been drafted by real estate specific legal professionals in order to protect your deposit, monthly option premiums and right to purchase the home. 

 

  • What is an option to purchase agreement? 
    The option to purchase agreement is a document that outlines your exclusive option to purchase the home you choose to rent-to-own.  It will include your initial deposit, monthly option premiums and future purchase price in the agreement. 

 

  • What is a lease agreement? 
    The lease agreement is like a lease where it states the responsibilities of the leasee 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. 

 

  • Do we need a lawyer? 
    The Agreements have been drafted by real estate specific legal professionals. 
    We DO recommend that you have your lawyer take a look at all agreements 

 

  • Who is responsible for maintenance/repairs? 
    You will be responsible for any repairs and maintenance of the property as 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 to purchase. 

     

  • Who is responsible for utilities? 
    You will be responsible for paying all utilities which can include electricity, gas, cable TV or internet service, etc. 

 

  • Who pays the taxes on the home? 
    The investor(s) who will be holding the home until you are ready to purchase will be responsible for paying the taxes on the home. 

 

  • Who pays the insurance on the home? 
    The investor who will be holding the home until you are ready to purchase will be responsible for paying the insurance on the home. 

 

  • Will I need tenant insurance? 
    You will need contents/tenant insurance which covers certain items inside your home such as carpets, appliances, personal belongings, etc. 

 

  • What if I decide not to exercise my option to purchase? 
    In extreme cases, if you decide not to exercise your option to purchase you will lose your initial deposit and monthly option premiums which can add up to thousands of dollars.  We do not recommend this.  

 

  • What happens if I cannot buy the home? 
    There are a few options should you be unable to qualify for a mortgage by the end of the program.   If you require more time to repair your finances we can discuss extending the lease term until you are able to. 

 

 

 

  • What are some reasons for not being able to qualify for Rent-to-Own? 

  1. Not enough down payment 

  2. Cannot prove steady income 

  3. Inability to meet deadlines (we perform reference checks) 

  4. The house prices you are looking at are out of your Lease-to-Own range 

  • Are there any hidden fees in your Rent-to-Own program?  Anything that will surprise after committing to the program? 
    This is easy to answer.  No. 

 

  • What areas of the city do you typically work in? 
    We work throughout the GTA and surrounding areas so we are happy to work with you to buy your home in any area in Ontario (Scarborough, Etobicoke, Mississauga, Brampton, Markham, Richmond Hill, Pickering, Ajax, Whitby, Oshawa, Bowmanville, Newmarket, Bradford, Barrie, Orillia, Kewick, Kitchener, Waterloo, Cambridge, Guelph, Stratford, Hamilton, London) to name a few areas.

    416-275-3965
     

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18 Sep 2019

Updated: August 01, 2017

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