What is Lease Purchase (rent-to-own, rent-2-own, rent-2-buy, rent-to-buy)?
It is a process where you are able to Lease a property with an option to buy it for a set price.
How is Lease Purchase (Rent-to-Own) different from renting?
Renting a place allows you just to continue to live there until you move out. It is long term Not your home. I have seen some tenants literally pay rent for 20 plus years because they always felt the price to own their own home was too much, meanwhile they have spent over $250,000 on rent during that timeframe. Which really means that they could have been able to purchase all along that 20 years. With Lease Purchase (Rent-To-Own) it allows you to put an “Initial Option Deposit” down on your home and over the course of 2 to 3 years, part of your rent payment is put towards your down payment for your “Monthly Equity Credits™”. Your Down Payment Equity Builder™ which is a combination of your Initial Option Deposit and your Monthly Equity Credits™ continues to get larger month over month until your able to qualify for a conventional mortgage. You money is not going just towards rent but rather towards home ownership.
What is a lease agreement?
It is basically a lease agreement that states who is responsible for the maintenance of the home, the length of the term of the lease as well as the monthly payments will be.
What is the Option to Purchase Agreement?
It is a document in which is in place that highlights your exclusive option to purchase the home you choose to Lease Purchase (Rent-To-Own). Everything will be included within that document including your initial deposit, your monthly option credits and the future purchase price in the agreement as well as the date you will own the home.
What are Monthly Equity Credits™ (Rental Credits)?
When you pay your rent on a monthly bases we take a portion of your rent and put it towards your Monthly Equity Credits™ (Rental Credits). The amount of your Monthly Equity Credit™ is predetermined at the beginning of the agreement. You will know exactly how much is going towards your Down Payment. These funds goes towards building up your overall Down Payment. We combine both your Initial Option Deposit and the Monthly Equity Credits™ together. When combined together we call this your Down Payment Equity Builder™ which goes towards your overall purchase price of your home. It is like a Planned Savings Program.
How does our Lease Purchase program work?
Your able to lease the home from us over a period of time. You purchase it from us at a predetermined date with a set price. Your purchase price will never go up. We even have a Price Lock Home Guarantee™.
On a monthly bases as your making your monthly Lease Payment, you have Monthly Equity Credits™ that goes toward your Down Payment Equity Builder™. The Down Payment Equity Builder™ goes towards your overall Down Payment Deposit when you qualify for a mortgage.
Over the 2-3 year period your working with our Welcome Home Team™ and you are using our Credit Builder System™ your able to repair any busied credit and raise your Credit Score so that your able to qualify for a mortgage.
What is the Option Deposit for?
We need to know that you are serious about purchasing the home and therefore need you to give us some security. After all, we are purchasing the home for you that is at least $400,000 and therefore we are taking on a sizable risk.
Are the monthly payments higher than rent?
Yes. The payments are higher than rent to ensure that you complete the lease term with a minimum of 10% down payment. The extra that you do pay goes towards Down Payment Equity Builder™ . It is like a savings program for a down payment. The higher rent will also go towards covering the land transfer cost, the legal expense and everything that it takes to acquire the home for you and your family. This helps to eliminate any surprise charges at the end of the agreement.
What happens if the property prices skyrocket during my Tenant Buyer Lease Purchase Agreement™?
The price is agreed upon at the start of your Lease Purchase Agreement. It is protected with our Price Lock Guaranteed Home Program™ and therefore, should the prices skyrocket, you will be getting a bargain, with lots of equity already built in.
How long does the paperwork take?
If you have submitted a completed application, it usually takes only 2-4 business days to approve. We require spouses and common-law spouses to complete a separate application, as this will ultimately improve your chances of being approved. If your application is approved and we have received your Initial Option Deposit confirming your commitment to purchase, we then forward an itemized list of what you will need to bring with you when you sign the Lease Purchase Agreement. Once you have verified that everything is acceptable to you. It really is that simple!
What is the minimum Lease Purchase (Rent-To-Own) term?
The minimum term is 2 years. Working with our credit specialist will help you to reduce your debt load and help you to qualify for a conventional mortgage.
How much down will I have at the end of the Lease Purchase (Rent-To-Own) term?
We will help you to get to a minimum of 10% down payment money for you to qualify for the home. General times the equitable stake will be a lot more as the property values continue to rise over the period, so you could be looking at much higher equity within the property.
Will we be given a budget?
Yes, you will be given a budget in terms of how much house that you can buy. It is based on your income level and how much current debt you have.
When we choose a home, is it just about price and value of the home?
We look at it from a real value point of view not just the price. We don’t want you in the lowest quality of home that your hard earned dollars can buy. We look at schools within the area, transit, hospitals, infrastructure within the community as well as the quality of the home. We want you to live in a safe environment. So we would rather pay a little more for that home than to purchase the cheapest house within the area.
Does a portion of my Monthly Option Credits goes toward the purchase price?
Yes. Along with your monthly rent there is a portion of your payment that will go towards your property down payment and closing cost when it’s time to purchase the home. Your Initial Option Deposit and your Monthly Option Credits are combined to form the Down Payment Equity Builder™. The Down Payment Equity Builder™ funds goes towards your overall Down Payment for the purchase of your home.
Will my monthly payments change throughout the Lease Purchase (Rent-to-Own) term?
No. Your monthly payments will never change during the Lease Purchase (Rent-to-Own) period.
Does Every Family Deserve A Home™ approve the house that we want to Lease Purchase (Rent-to-Own)?
Yes, we do. Even though we are purchasing the home on your behalf we need to ensure that it is a good property, priced right and a full analysis is done on the property to ensure that it will have a good value for the future.
Will you purchase a home if I find one that I want?
If you already have a home in mind then we will have a look at it. You will need to qualify for our program “We Buy It Purchase Program™“; otherwise you can purchase a home from our Property Listing inventory. We do also have our own Welcome Home Team™ of realtors that we work with that will take you shopping for a home in the price range that you qualify for. Then we will secure the home for you.
Do we need a lawyer?
We do recommend that you do have a lawyer to understand the agreements. The Agreement will be drafted by a real estate lawyer.
What kind of agreements are in place to protect me?
A “Lease Agreement” and an “Option To Purchase Agreement” is used to protect your initial option deposit and your monthly option credits. The Option Agreement is also used to protects your right to purchase the home. The agreements are drafted by real estate lawyers.
Who owns the house while I Lease Purchase (Rent-To-Own)?
We will own the home with our investment partner.
Are there any hidden fees in your Lease Purchase (Rent-To-Own) program? Anything that will surprise after committing to the program?
No. There isn’t. There is No Monkey Business here!!!
What is the Price Lock Guaranteed Home Program™?
It is where we Lock in your purchase price for your home. Within different areas of the Province of Ontario homes have gone up 13.9% from the previous year, and the same area went up as high as 6.7%. That is great if you own the home, however when you’re buying it’s not good because you need more funds to get the same house. When you work with us, your home price is pre-determined from the beginning and is Locked into a price. As the market prices of your home continues to rise your price will not rise and your will be able to take advantage of your home value as it continues to increase. As a result it is causing your equity within your home to increase.
What happens if the house market goes down?
The risk of this happening in within The Greater Toronto Area and other Desirable areas is very slim but if it were to happen we would just extend the term until the market recovered and you were able to qualify for the mortgage.
Are property taxes, condo fees and insurance included in my monthly payment?
Yes. All our payments plans are all inclusive: This includes property taxes, real property insurance and condo fees (if applicable) are covered. This service is provided by Every Family Deserves A Home™ to ensure all payments are made in a timely manner.
Who pays for the regular maintenance on the property?
You do. You will be the direct benefactor from any improvements that you make. Overall it will increase the value of your investment. You are responsible for the property maintenance. Remember that all homes do require regular maintenance.
What happens if I am unable to make my monthly payment?
Just like you are in a traditional rental or in a mortgage for your home, you are to honor your commitments and obligations. If you fail to do so, you will be considered to be in “default” under the terms and conditions of the agreement.
If you default, we reserve the right to immediately commence legal proceedings to recover and secure our interest in the property. If this happens, you may lose all your equitable interest in the property, including but not limited to: initial option deposit, monthly option credits, and any appreciation of the home. We will also be entitled to recover any and all legal costs that we may incur.
Yes, this sounds serious. We would like to make you fully aware of all rights and obligations (both yours and ours) under the terms and conditions of the agreement. Please be aware of everything involved in the agreement before you sign.
What happens if Every Family Deserves A Home™ goes out of business during the initial term? Do we lose the house?
For each property that we purchase for our Tenant Buyers we make sure that we have a “Reserve Fund” in place if problems arise. But really the only why that would go out of business if you do miss a number of months without paying your monthly rent. If you don’t pay your monthly rent on time and you do that over a period of time then you will lose the home.
Do you do Lease Purchases for new homes as well as resale?
No. Due to the HST on newly built homes.
Can I have the property inspected before signing the agreement?
Now that you have found a house that you like, we will make a conditional offer on the property that allows you the “Tenant Buyer” a satisfactory inspection. You are responsible for the cost of the inspection and you are required to attend the inspection with us so that we all know the condition of the house.
Does my Initial Option Deposit go towards the purchase price?
Yes, 100% of your Initial Option Deposit does go towards purchasing your home.
Who pays for the home repairs while we are in the “Lease Purchase”?
Since this will be your home at the end of the agreement, once you move into it you are responsible for all appliance repairs.
When we purchase the home for you we insure that the roof is not leaking, the furnace or heating system is working, all the other major components of the home works before we even turn it over to you. We do this to ensure that you get a quality home.
Is there a warranty or guarantee on the property?
There is no warranty or guarantee on any of the properties that we buy for Tenant Buyers. We do have the properties inspected by a certified inspector at the time we purchase the property. This is to help discover any problems that the house may have. If the certified inspector finds any major structural or mechanical problems then we would have your family find another property.
Who does the home inspection?
We will have someone who is a certified home inspector that is part of our team to inspect the home. Depending on where the home is will determine who we use.
Is the purchase price of the home negotiable?
No, the purchase price is not negotiable; however, the terms and conditions of the published monthly payments are somewhat negotiable. It depends on how much down payment you have to work with. We review and approve each application on an individual basis.
How long do I have before I must purchase the home?
Generally it takes about 2 to 3 years for you to save up enough so that you can qualify for conventional financing. If you need extra time to qualify for financing then we are able to extend the “Lease Purchase Agreement” for another 12 months.
Who chooses the home?
You do! You and Your Family is able to choose the home that you Deserve. We let you choose the area that you desire the most.
We do have restrictions on where the property is located. The property must be with in a city or town that is larger than 10,000 population. It must also have access to good schools and where property values are steadily increasing.
Is my initial deposit refundable if I change my mind?
No. Your Initial Option Deposit is not refundable if you change your mind.
Once we place an offer on a property and we wave all the conditions to purchase the property then we ourselves are bound to continue with the purchase of the property. If you at this point just walks away from the “Lease Purchase” then we are still on the hook to purchase the home that we were purchasing for you.
It is refundable if we do not approve your application, or if a certified house inspection uncovers some major structural or mechanical deficiency that can’t be fixed.
What happens if I change my mind?
Our agreement will state that the Initial Option Deposit and Monthly Equity Credits™ (Rental Credits) are non-refundable and can only be used towards your down payment on completion of the purchase. You are free to walk away at any time but will lose your money. This is why we encourage you to ask lots of questions to ensure that you fully understand how the program works. We would also recommend that you continue with the program to own your home. Then you can do whatever you want with your home.
What if I decide not to exercise my option to purchase?
It is unfortunate that you do that. We would only hope that you would continue to exercise your “Option To Purchase” so that you would be able to gain the equity that you have built up within your home.
What do we do when the Lease Purchase Agreement ends?
Your term of your agreement is just about to end. You have been able to meet with our Welcome Home Team™ and have gone through our Credit Builder System™. Your credit has been dramatically improved over the timeframe. You meet with our Welcome Home™ mortgage specialist and qualify for a conventional mortgage. Your mortgage is approved. Hurry!!! You and your family gets the deed on the property at the closing of the agreement. You are now a proud home owner within the Every Family Deserves A Home™…
Are we allowed to have children or parents live with us?
Yes. You are allowed to have a family. It is your home after all and you can have children or parents live with you.
Can I have pets?
Yes. You can have as many pets as you wish. Remember, you are not just renting, you have an ownership stake in the property.
How soon can I get into my dream home?
The application process only takes a couple days. Then we need to confirm all the details. What takes the longest is acquiring your home. That can generally take anywhere from 3 to 12 weeks. Included in that period of time is you shopping with our Welcome Home Team™ realtor to make the process easier. Then we have to purchase the home. That takes the longest.
Do I need to put any cash down?
Yes, if you are a suitable candidate for the program, we will need an Option Deposit Down Payment of approximately 4% of the purchase price of the home.
How much of a down payment do I need?
You choose the Program that you want. Ideally we want to get you to the point where you are able to qualify for a mortgage with at least 10% of the property value.
We have three options for you to consider:
This is for an average home in The GTA that is priced at $500,000.
Welcome Home Gold Program™: With $25,000 Option Deposit (5%) and Monthly Equity Credits™ of around $695.
Welcome Home Silver Program™: With $20,000 Option Deposit (4%) and Monthly Equity Credits™ of around $835
Welcome Home Bronze Program™: With $15,000 Option Deposit (3%) and Monthly Equity Credits™ of around $975.
The more that your able to put down, then the less that you will have to pay on a monthly bases.
The minimum that we require you to put down is $10,000. This is for homes that are priced under $200,000.
The more funds you are able to put down towards the purchase of your home, the more your Down Payment Equity Builder™ grows. This is a combination of your Option Deposit and your Monthly Option Credits.
If Accepted in the program, is there a Fee?
When you are accepted into the program, we require an “activation fee” of $750 plus HST. This is to ensure that you are serious about getting into your dream home.
There is a lot of work from our end to help you get the home that your family deserves. The activation fee does go towards your Option Deposit once you have selected your home.
What are some of the reasons I might be declined for your program?
Lack of Adequate down payment: Our program works really when you are able to qualify for financing your home…If you don’t get to that point then we don’t win as a company.
Any company that allows you to qualify with $0 down or 1% down doesn’t really have your best interest at heart.
We would rather that you wait a bit longer to save up more in order to qualify than for you to come in now and fail. The larger the down payment that you make allows helps to ensure that you are able to qualify for a mortgage down the road.
Short Time on Job: We are looking for applicants with at least a 6 month on the job and with a combined income of $50,000 a year.
Location of Home: The property must be with in a city or town that is larger than 10,000 population. We only purchase homes in towns and cities within Ontario. It cannot be a vacation property.
Too Many Debts: In some cases, it’s not only the amount of the debt owed by an applicant that prevents qualifying for the Home Ownership Partner Program™ – (Rent-To-Buy, Rent-To-Own) but it is the extensive use of numerous credit card and revolving accounts with evidence of increasing account balances that are close to the card issuers debt limits may be enough to stop the application process. We would recommend that you reduce your debt load some more and apply at a later date.
Do I have to have all my deposit money up front?
No. Depending on the property and your personal credit situation, we may accept a payment schedule that is stretched over a number of months. Each application is reviewed and approved on an individual basis.
My credit isn’t great, can I still qualify?
It really depends on your individual situation. Whether your credit is bruised, or you may have in the past had a bankruptcy. We will look at your situation to work with you. You may be able to qualify for the program. We are not like the financial institutions. We truly want to help you become a home owner and want to Welcome Home™ your family. All we ask that you are honest with us about your financial information. We measure our success on the number of people we are eventually able to assist in qualifying for a conventional mortgage. We look at it this way…if you win, we win; if you fail, we fail.
What forms of down payment do you accept?
We will accept any form of certified funds (certified cheque, bank draft or money order) for the Initial Option Deposit. If you have equity in a property that you are currently selling, we will accept proof of your equity until the property sells. You may have other assets that we would consider on an individual basis. Please speak with a Every Family Deserves A Home™ representative to obtain further information.
What if I’m self employed or I am a business owners?
Great, we can help you. In fact we specialize in this area. We ourselves have been self employed and business owners so we understand what it like.
Can I purchase this home with my family?
Yes. Today because of the raising house prices we see more families coming together to purchase homes. You might be in a situation where you are working, as well as your mom or dad is working too and with that extra income you are able to qualify for the program. You may even want to have a home with a secondary suite so that you both are living in each unit within the same home.
How quickly can our family move into our home?
You can move into the property as soon as the Lease Purchase Agreement has been signed and you have provided us with the required Initial Option Deposit.
If you are purchasing a property through our We Buy It Purchase Program™, you may take possession as soon as Every Family Deserves A Home™ gains legal possession of the property.
I am new to Canada; can I still qualify?
Yes. At Every Family Deserves A Home™ we strongly believe that “Every Family Deserves and Has the Right to Own Their Own Home!”. We want to assist many new Canadians in realizing their dream of owning their own home. Just because you arrive with no credit established does not mean you should be penalized. With the assistance of our Welcome Home Team™ and going through our Credit Builder System™, we do our very best to help you establish and build up your credit rating with the credit bureaus of Canada.
How do I qualify for the program?
The approval process is quite simple. If you have reliable income with the monthly income to support your payment and you are willing to be honest about your credit history, you may very well qualify. We are not like conventional lending institutions; we believe that Every Family Deserves a second and sometimes a first chance! Fill in an application – you may surprise yourself!
Can I borrow funds for my initial Lease Option Payment?
Yes. You can use borrowed funds to make your down payment. We believe you are free to choose where you get it.
If I am Self-Employed, Commissioned Based Sales Person or a Business Owner can I still qualify?
Yes. You can qualify for the program. Our qualification process is very flexible and takes into account that your income may not always be guaranteed. We can also help you to increase your revenue once your part of the program.
What is the minimum age to be able to participate in your Program?
The minimum age is 18.
What if I have a bankruptcy in my financial history?
Yes. Unfortunately bad things do happen in people’s lives from time to time. We will look at your situation. Just be honest with us about how and why that you have gone bankrupt and we can work with you.
Bankruptcy shows up for 7 years on your credit score. There could have been a number of reasons why you have gone bankrupt. It could be because of a business that has failed, over indulgent on cars, travel, pleasure, a law suit, nonpayment of income tax. But whatever it might have been, just be honest about why and how it happened.
What if I just changes jobs?
That is fine if you just changed jobs. We do prefer if you have been working someplace for a minimum of 6 months. We will look at where you have worked at in the past. Likely you have moved from a lower paying job to a higher paying one.
What if I have gone through a divorce, separated, or widowed?
If you have been divorced or widowed and or are currently going throw a separation or a divorce then we can accommodate you. We will help you get into the home that you need to move on in your life.
Who is this program really for?
This program is really for those that haven’t been able to qualify for a conventional mortgage. You may have a number of reasons why you have been turned down by the banks. We will work with you if you have been Divorced, Self-Employed, A Business Owner, A New Resident, An Immigrant or Bankrupted.
What are my options if I don’t have the down payment but can afford the monthly payments?
Save it and contact us when you have it.
Sell off one or more of your toys, vehicles, etc.
Who is Lease Purchase (Rent-to-Own) for?
A Lease Purchase (Rent-To-Own) is for those that can’t get traditional financing for a mortgage. This may be due to a low credit score, one family member is self-employed, a business owner, an immigrant, or you may have a low down payment.
It can also be for those families that cannot refinance their current home. When this happens this is called an “Orphan Mortgage”.
What will insure my contents within our home?
You are required to purchase a resident insurance policy to cover your possessions inside the home.
What happens if I want to move during the Lease Purchase term?
If you wish to move during the term of the agreement you can have it rented to a relative or to a tenant and you will still be able to complete your Lease Purchase Agreement. We would have to approve that family renting it from you. You still will be responsible for the monthly rent that was set before you enrolled in the Lease Purchase Agreement if there was any deficiencies between the monthly rent that you where getting and the agreed upon lease. And at the end of the term you can still complete the Lease Purchase Agreement, get the financing that you need for your mortgage and do what you want with your home then.
We don’t want you to walk away from the Lease Purchase Agreement. We would rather you complete it. But sometimes you may have to walk away if you really need to. It would be unfortunate.
Can I sell the property?
Yes. You will be able to sell your interest in the home as long as you have met all the terms and conditions and your obligations of the Lease Purchase Agreement and the Option to Purchase from us.
What happens if I don’t want to buy the house at the end of the lease because I am not qualified?
You have a few options. If you need more time to improve your credit score, we can extend the lease and amend the Agreement for another 12 months. You can continue to live in your home until the “Lease Purchase Agreement” is completed.
Can I paint the walls?
Yes, you can. This is your home. You and your family are able to treat it like your home.
Can I do a major renovation or remodel the kitchen?
Yes. It can be done before you move into your home and we approve all the work with our approved renovation team. All the permits will be in place with the city to allow the work to get done. We don’t want the work to get started and not get finished. We will have licensed contractors to do all the work to ensure that it’s done correctly and to code.
What happens if I choose to “Walk Away” from the agreement?
If at any time during the term of the agreement you choose to “Walk Away” from your obligations, you will lose and all equitable interest in the property and will be responsible for any and all additional expenses that may be incurred on our behalf.
However, we do recommend that before you “Walk Away” that you continue with the “Lease Purchase Agreement” and purchase the home so that you will be able to retain your equity. You will be able to then sell it if you need to or have it as a rental property to build wealth.
Do I have to live in the property or can I rent it out?
You do not have to live in the property and may place a tenant into the property if you wish. They would have to still be qualify by us. Please note: you will still be fully responsible under the terms and conditions of the lease agreement that you signed with us. You will also be responsible for all maintenance, repairs and damage that may occur.
Who is responsible for utilities?
You are responsible for the utilities including the heat, electricity, phone, internet and cable just like any other home that you would own.
Will I need tenant insurance?
Yes. You do need to have content insurance on your personal items. We will have insurance on the structure of the home.