Rent To Own
Rent to Own Program
Rent to Own is a great option for those that would like to own their own home, however are unable to use traditional finance options. There are lots of ups and downs situations in life and here is one that should point you in the right direction. Are you in a position where your finances have been compromised; such as a divorce, bankruptcy, newly immigrated, self-employed, new to the working force or any other situation in which you are unable to qualify for a regular mortgage?
Our Rent to Own program guides you how to repair your credit while saving for a down payment. Let us help you build your credit so you can become a home owner sooner!
How it Works
1. APPLY
Apply for our program with our simple application that consists of a few basic questions. If you meet the initial requirements, we will contact you to review your financial details further. With your approval, we will review your credit history with the credit bureau.
2. QUALIFY
If you qualify for our Rent to Own Program, together we will calculate how much of a monthly payment you can afford to pay for a home. Then we will review the amount of time you need to work on your credit to ensure that in a few years a traditional bank will qualify you to purchase your home.
3. DOWNPAYMENT
You will require a down payment to obtain the Option to Purchase the home in 2 to 3 years. The down payment minimum is $6,000 and may be as high as 4% to 5% of the final home purchase price. For example, if the future home purchase price is going to be $300,000, then the down payment could be as high as $15,000.
4. SEARCH FOR HOME
Once we calculate the amount that you can afford for a home, we will set you up with one of our qualified Realtors to start searching for a home. When you have found a suitable house we will complete the purchase through our secure financing. The home is purchased in a standard fashion; however someone else secures the financing for you until the Option to Purchase is triggered. We will complete due diligence during the purchase process and have an inspection completed by a reputable home inspector before we purchase the home to minimize the risk of surprises with the home upon closing.
5. SIGN DOCUMENTS
Two documents are signed prior to closing on the home: One is a LEASE AGREEMENT which is very similar to a standard lease agreement and second is an OPTION TO PURCHASE AGREEMENT which allows you to purchase the house at the end of the lease agreement term for a pre-set purchase price (not necessarily the price the home is currently for sale at). One we have all of the conditions waived on the home purchase and all the documents are signed, the day the home closes, you move in!
6. ONCE IN THE HOUSE
During the leasing term, we will meet with you every six months to ensure that everything is acceptable with the home and that you are financially on track to purchase at the end of the lease term.
7. AT THE FINISH LINE
Nearing the end of the lease agreement we will work with you to ensure that you are meeting all the requirements to be approved for a traditional banking mortgage. Once the Option to Purchase Agreement has been triggered and you are approved through a financial institution you will purchase the home from Colmac Properties and become the sole owners of your home. During your leasing term, through the assistance offered in this program, you will have re-established your credit and saved the complete down payment required including all closing costs. Upon closing you will be able to feel confident with the purchase of your home, knowing that you are in a secure financial position to afford your home that you have earned.
Documents
Two documents are signed prior to closing on the home: One is a Lease Agreement which is very similar to a standard lease agreement and second is an Option to Purchase Agreement which allows you to purchase the house at the end of the lease agreement term for a pre-set purchase price (not necessarily the price the home is currently for sale at). One we have all of the conditions waived on the home purchase and all the documents are signed, the day the home closes, you move in!
We meet with you every six months to ensure that everything is ok with the home and that you are financially on track to purchase at the end of the lease term. When the Least Agreement ends and the Option Agreement is triggered a few years down the road and you have been approved with a traditional bank for a home mortgage, you buy the house from us. AND during the 2-3 year term; our program will have allowed you to save the full down payment including closing costs as part of our program.
Rent to Own Application
Our preliminary application process is known as a prequalifying process. There are a few basic questions that we ask to see if this program is a fit for you right now, or if there may be a little work to get you on track for our Rent to Own Program. Some of the questions that we will ask you are as listed below; depending on your answers we may require further information. Each situation is unique and we provide assistance that is tailored to your individual needs.
- What is your annual household income range?
- less than $50,000
- $50,000 to $70,000
- $70,000 to $90,000
- greater than $90,000
- If you are renting, how much is your current rent?
- Does your current rent include utilities? If not, approximately how much are you paying in utilities per month?
- How much do you have saved as a down payment?
- Have you ever filed for Bankruptcy or had a consumer proposal (similar to bankruptcy)?
- How much do you have in total outstanding debt (car loans, credit cards, lines of credit, school loans, etc.)?
