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Please e-mail us or call us to set up a confidential, private appointment.
Anita Morrow, Real Estate Investor
anita@trulylivingclub.com
416.879.7217
Scott Morrow, Investment Advisor
scott@trulylivingclub.com
416.890.5981
Your private information will never be shared, sold, rented or otherwise abused in any way. All your communications with us are confidential.
Frequently Asked Questions (FAQ)
How Does A Rent To Own Home Transaction Work?
If you have heard about renting to own a home, and are not sure what it is or how it works, then keep reading...
Renting to own a home is a lease with a difference - you have the option to buy the home at any time during your lease period.
The Difference Between Renting And Renting To Own?
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Rent
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Rent To Own
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Rent money is lost forever.
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A portion of your rent goes towards your down payment or the price - kind of like a savings account. This is called a rent credit.
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Your landlord does not want to sell the home.
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You don't so much have a landlord as you have a seller whose intent is to sell the home to you.
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Purchase price is never discussed, since the home is not for sale.
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The price you will be buying the home for is set at the beginning of the lease in the form of an option to purchase.
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Landlord is responsible for all repairs.
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You are responsible for the repairs since you are a home owner to be. This is the house you want to buy and therefore you are treated like a home owner.
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Rent is set at market rates.
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Rent may be slightly higher than market rates since a portion of it is going toward your down payment or reducing the sales price. This allows you to build equity while you are getting ready to buy.
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A security deposit, first month's rent and sometimes the last month's rent will be required to move in. The security deposit is refundable in case of no damage to the home.
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A down payment, called "option consideration", will be required. This will lock your option to purchase on the property, and will go toward the purchase price as a down payment. This is not refundable if you choose not to buy by the end of your lease. First month's rent, and sometimes a security deposit will also be required.
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When Does Renting To Own Make Sense?
If you are tired of renting and want to purchase a home, but your credit, income situation or other factors will not allow you to qualify for a home mortgage right now, then renting to own is for you. If insufficient credit is holding you back, then you need some time to fix it. By doing a rent to own home transaction, also known as a lease option or lease purchase transaction, you get to live in the home you want to buy right now while you work on getting your credit fixed.
What if I have less than perfect credit?
Don't worry, rent to own programs were uniquely designed with your situation in mind. Sellers of rent to own will expect you to have bumpy credit and they are specifically marketing to you. Qualification for a rent to own ownership program is based more on your ability to make the monthly payments and to put down a reasonable down payment than it is on your credit. The reason for the lease term before the final purchase is to allow you time to repair your credit, yet stay in the home you want while your score is improving.
How much would I need to put down?
Five percent to seven percent of the agreed upon purchase price is customary. Amounts below and above that can be individually negotiated. The higher the down payment you have, the more attractive it is to the Seller to sell to you instead of to other people also interested in the same home. Additionally, it makes it easier to qualify for a loan later on as your down payment has already been made. Just remember, if you decide not to buy the rent to own home then this down payment is not refundable.
How can I be sure that my credit will be good enough to buy before my term expires?
Good question. It depends on you, and your specific circumstance. If you only need to pay off a few items and you know you can get it done, then you're fine. If however you have open collections, judgements, and maybe bankruptcy on your report, then you need help.
Do three things: a) Get in touch with a loan officer (mortgage broker) and have them pre-qualify you. Let them tell you exactly what you need to work on to qualify for a loan. b) Set up a debt repayment program. These programs can work wonders, we have seen folks qualify for a loan within 6 months of joining such a program, some even when they had really poor credit to begin with. c) Be very responsible with your credit during your rent to own term. Do not open any new accounts, don't make any additional debts.
If you decide to purchase a property through the "Truly Living Club" program we will work work hand in hand with you and a loan officer (mortgage boroker) to help you improve your credit score! Go to the "Contact Us" page and leave us your phone number or email and we will call you to set up a confidential appointment.
When You Should Not Do A Rent To Own Home Transaction?
There are times when entering into a rent to own home transaction is a bad idea. You don't want to lose your option down payment because you were not prepared to purchase the home. Here are the top five situations when you should not be doing a rent to own home transaction.
- If you don't have the discipline to change your financial habits if bad credit is the problem
- If you are not prepared to do what it takes to get ready for a mortgage eg. credit repair, setting up trade lines, paying rent on time
- If you are not sure that this is the right home for you
- If you don't know how long you will stay in this town because of job or family reasons
- If you don't have a steady income. Your mortgage will not be approved without a stable income source
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