Frequently Asked Questions
WHAT IS RENT TO OWN?
Rent to Own is similar to a lease – you will make monthly rent payments on a home of your choosing. With Rent to Own a portion of your monthly payment will be credited towards your down payment, with the goal of having an appropriate down payment at the end of the term for you to qualify for a traditional mortgage
DOES RENT TO OWN COST MORE THAN A REGULAR RENTAL?
In most cases yes, but only slightly. Rent is calculated based on comparable rates at the time the agreement is signed, however, an additional Option Fee is paid on a monthly basis.
WHAT IS AN OPTION FEE?
With a rent to own agreement you pay monthly rent and option payments. Option payments are a type of forced savings that you put into your property, so you have a larger down payment and can easily qualify for your mortgage at the end of your term. The minimum down payment required at the end of the term is 5% in order to qualify for a mortgage. The monthly Option Fee is calculated based on the difference between your initial deposit, and 5% of the final purchase Price.
WHY DO I NEED AN INITIAL DEPOSIT?
An initial deposit is required to enter into a rent to own agreement. This is in place for two reasons, the first being that it helps to keep your monthly costs lower. The second it shows us that you are committed to the rent to own and will take care of the property from day one.
HOW MUCH DO I NEED FOR THE INITIAL DEPOSIT?
At Alpha Property Group we require a minimum of 3% of the final purchase price for your initial deposit. Ex. if this final purchase price was $400,000 the minimum initial deposit would be $12,000.
HOW DO YOU CALCULATE THE FINAL PURCHASE PRICE?
We apply an appreciation rate appropriate to current market factors, including geographical location. The appreciation is calculated modestly in order to give our Tenant-Buyers the best chance of qualification at the end of their term, and to have equity in their home once they take ownership.
IS RENT TO OWN DIFFERENT FROM A MORTGAGE?
Typical mortgages are loans taken from a bank which you make regular payments, including interest on the loan amount. With Rent-to-own, you make regular rent payments in addition to a monthly Option Fee with the aim of saving up for your down payment or repairing your credit situation. Our program aims to have our Tenant-Buyers ready to qualify for a traditional bank mortgage at the end of their term
WHAT HAPPENS IF I DON’T GET A MORTGAGE AT THE END OF THE RENT TO OWN TERM?
We build our Rent to Own agreements tailored to your particular situation. If our plan is followed, the chances of getting a traditional mortgage are very high. Since life can be unpredictable at times and financial situations can change, we have the flexibility to extend terms if necessary. We have a team of mortgage specialists that can provide options for you as you reach the end of your Rent to Own term
I’M A FIRST TIME HOMEBUYER. CAN I USE THE FIRST TIME HOMEBUYER INCENTIVE?
The first time homebuyer plan is designed to be used when you get your first mortgage. If you have not used this incentive in the past, you will be able to take advantage of this when you obtain the mortgage at the end of your term. In additional, a portion of your land transfer taxes may be waived.
CAN I RENOVATE MY HOME DURING MY RENT TO OWN TERM?
At Alpha Property Group, we consider our Tenant-Buyers homeowners from day 1. You are allowed to renovate or upgrade your home as you see fit. Anything you can do to make it feel like Home is always encouraged!
WHAT IF I HAVE POOR CREDIT?
Our Rent to Own program is designed to help those with poor credit a chance to rebuild their score in order to qualify for a traditional mortgage by the end of their term. No matter what your score is, we can help build a roadmap to home ownership!
I HAVE EXCELLENT CREDIT, BUT NOT ENOUGH OF A DOWN PAYMENT. IS RENT TO OWN FOR ME?
Yes, another great candidate for our Rent to Own program is someone with great credit looking to save up for a down payment. If your goal is home ownership we can build a plan that allows you to save monthly towards your down payment, while allowing you to move into your home sooner.
I AM INTERESTED IN RENT TO OWN, WHERE DO I START?
Apply through our online application portal to get started. Rest-assured we do not check your credit as part of our online application, however if you know it please let us know. Our team will be in touch within 24h to discuss next steps!