Frequently Asked Questions
What does Rent to Own actually mean?
In most cases, a rent to own agreement is a contract on a property that works like a lease and leads to a purchase. It’s often called a lease with an option – or a lease/option agreement for short. The lease portion is a standard rental agreement that includes the monthly rent and other typical terms.
The option in the contract gives you the right to purchase the property after a set time period – usually around 12-18 months. This gives you the ability to save more money towards a down payment, repair credit, increase your income, or otherwise improve your ability to qualify for a traditional mortgage.
Most of the time people use a traditional mortgage loan to purchase the property prior to the expiration of the option period, but there are other options if your financial situation has unique needs. We help lots of folks like you to purchase the home of their dreams.
What is the Rent to Own process?
The rent to own process is actually pretty simple. Once you’ve seen one of our fantastic properties, we’ll give you an application to fill out. Don’t worry – we help people with all kinds of credit and financial situations, and if you can afford the property, we can probably help you to own it.
After you’re approved to rent the property, just sign the lease, pay your option deposit and rent – then move on in! Your lease/option agreement will spell out the length of time that you have to complete the purchase of the property – typically 12-18 months, but in certain circumstances, we may extend your option if you need more time.
The purchase of your home usually takes place through a traditional mortgage loan, but there are other ways to complete the purchase, depending on your finances. That’s the process! Once you’ve completed your mortgage, you’re done – now you own your home! First step – sign up to find great properties around Colorado just by filling out the form. You’ll get immediate access to great rent-to-own homes, plus a whole lot more.
Is this like buying appliances or furniture rent-to-own?
Yes and no… There are many companies out there that provide a rent-to-own service for furniture or extra appliances, and you’ll get lots of choices on styles and types. But be careful!
Even though rent-to-own real estate can be a great deal, some (not-so-honest) furniture companies will charge you huge amounts for a rent-to-own agreement. You might end up paying 2-3x more for these products than if you bought them outright.
Plus, those appliances will probably go down in value – unlike real estate, which usually goes up in value. Of course, you want your money to be going to an asset (like your home) that will rise in value, not expensive interest payments on new furniture.
What if I have bad credit? Can I still get a rent-to-own home?
Yes, you can! Many people with bad credit can still get a rent-to-own home. Every situation is different, but we specialize in helping people who have been through tough circumstances (or just made mistakes in the past) to repair their credit and get started on the path to a great financial future.
Even if your credit is bad, you can still own a property! One of the major benefits of a rent-to-own scenario is that it gives you time to repair your credit before you purchase your home. You’ll enjoy many of the benefits of homeownership while you’re rebuilding your credit and saving more money towards a down payment.
I’m self-employed or work as a commission-based employee can I still qualify?
We love applicants with Entrepreneurial spirit! Our program is designed to help families whose income may not always be guaranteed and we believe you shouldn’t be reprimanded for the type of income you earn.
What are the benefits of a rent to own home?
There are a lot of benefits of a rent to own agreement! In Colorado, lots of smart people are using rent to own agreements as a way to get the home of their dreams without having to qualify for a bank loan right away. In the past few years, banks have been very tight on their lending criteria. Most people who use a rent to own agreement want a few years to get ready to qualify.
Here are a few more reasons to use a rent-to-own agreement:
- Try before you buy! You get to live in your rented home before you actually purchase it, allowing you to make sure it’s actually your dream home. If you don’t like the house, you don’t have to complete the purchase.
- Own without great credit. You can start feeling like a homeowner right away while saving up and improving your credit.
- Privacy. You’re not listed as the purchaser on any public records until the closing takes place, giving you years of privacy.
- Move in fast. Since you don’t have to wait for a mortgage, you can often move in right away – and get started living a new life in the home of your dreams!
Is there a down payment on a rent to own home?
Yes, you will pay an option deposit when you move into your new home. All of your option fee will go toward your down payment when you go get a traditional mortgage and purchase the property. We can help you to structure the perfect scenario to meet your needs.
Can I use borrowed funds towards my Initial Down Payment?
You certainly can! We do not operate like the big banks do. If you have a close friend or family member who is willing to lend you funds, you can use that money towards the program. We are flexible with our clients and we believe you are free to choose where you get your initial down payment from.
What if I can’t afford the monthly payments or the Initial Down Payment right now?
Your monthly payments will approximate the payments you would make on a new mortgage with all of the costs considered, such as property taxes, insurance, and HOA fees (if applicable). We will also work with you to ensure you purchase a home that you can afford so that you have the best quality of life. Remember, it is our goal to ultimately qualify you for your own financing at the end of the Program, so it is not in anyone’s benefit to place you into a place you cannot afford.
How is the monthly payment calculated?
The monthly payment is modelled after the true cost of home ownership. We take the difference between your purchase price and your down payment and do a mortgage calculation at the same rate you would hope to get at the banks today. We then factor in the monthly expenses of property taxes and insurance or HOA fees (if condo or townhouse) and this becomes your monthly payment. This will be very close to the payment you will have when you do transfer the home into your name at the end of the term.
What are the requirements of a rent to own arrangement?
We know that every person, family, and situation is different. We do our best to help you uncover creative solutions to help you own the home of your dreams. Once you’ve had a chance to check out the house, you’ll fill out an application that will include detailed information on everyone living in the home. We’ll conduct a credit check and verify the income(s) for everyone over 18 who is living in your household to confirm that you’ll be able to make your monthly payment.
People with bad credit, no credit, limited cash available, and other financial situations have all been able to lease then purchase their perfect piece of real estate. We’ll speak with your references and previous landlords because relationships matter to us more than just scores assigned by a computer.
We love helping great folks to reach their dreams – fill out the form below to get started!