If you’ve visited our web site, or made any effort to connect with our program, it probably means that you would rather be a homeowner than a renter. That’s not surprising.
It almost certainly also means that you are currently unable to become a homeowner. If you could, you wouldn’t need us. And why can’t you? (Say it together): Because I can’t qualify for a mortgage!
So what’s keeping you from getting a mortgage now?
There are three main monsters that keep people from getting a mortgage. The first is insufficient down payment. Buyers who will live in their homes can still get a mortgage for a 5% down payment if they have stellar credit. But, you also need sufficient funds to pay closing costs, which include lawyer’s fees, property inspection fees, appraisal fees and, the big one in BC, land transfer taxes. Add it all up and you will need to prove to the lender that you have 7-8% of the value of that property available.
This is the biggest monster keeping people from getting a mortgage. How long will it take you to save up that much money? In our program, you only need about half of that to start. Then we have a “rent credit” component that helps you save up the other half over the term of our contract, usually 2 or 3 years. At the end of the term, you’ve got enough saved up to satisfy the banks.
The second monster is bruised credit. With tougher bank rules, you need to be a pretty good risk for the lenders to take you on. For many people, sometimes due to no fault of their own, they just don’t quite cut it.
The fact is, if you do everything right, you can raise your credit rating by a lot over a 2-3 year period; in fact almost everyone’s credit can be fixed within three years, as long as you are not still in bankruptcy or a consumer proposal. But most people don’t know all the ins and outs of credit repair and could use some help. Credit coaching is a key component of our program. We help you rebuild bruised credit in the shortest possible time, while you are already living in the home you have chosen to eventually own.
The third monster is inadequate work history. If you are new in a job, and especially if you are self-employed, the lenders will want a history of several years to show that you can maintain an adequate and stable income. For the wage-earner, this means waiting beyond any probationary periods and ensuring the employment is stable over the long term. For the self-employed, this may mean foregoing some of the attractive deductions that help to lower personal taxes, so that your income tax return will show the banks adequate retained income.
In a two-three year rent-to-own program, the time needed to establish income stability is earned while you are already in that home.
These are the things we look at when we qualify clients for our program. Can we together, over a two or three year period, bridge the gap between “currently unqualified” and “fully qualified?” We never want to set up a client for failure in the end.
Some clients ask, can’t I slay the monsters on my own? The answer is YES, you can. IF you are highly motivated, disciplined and have enough knowledge to guide your own credit-improvement program. AND if you are willing to wait a few years longer before getting into the home you’ve been dreaming about owning.
But if you think you could use the extra incentive and help provided by a reputable rent-to-own program, and you want to get into your home sooner, then you may want to consider working with us to help you become a happy homeowner!