• As a mortgage agent, I have been working for a few Rent-to-Own companies all over Ontario.  I help them to qualify both their potential tenant buyers and their perspective investors.  We look at both mortgage and rent-to-own qualification.

    Many people who come to us for qualifying, don’t fully understand the process so I thought in light of my TV spot last week on Rogers TV, I would follow up with a more thorough explanation as 5 min was not enough to cover it all.

    You can watch me on Rogers TV here 

    When it comes to Mortgage and/or Rent-to-Own qualification, a mortgage agent must go through the same process of qualifying people. What does that mean?

    Qualifying for a Rent To Own

    Whether you are a potential tenant buyer or a potential investor, a mortgage agent/broker will require you to fill out an application with consent for pulling your credit bureau.

    As you may or may not know, your credit bureau assists a mortgage broker to know your present and past credit history and allow us to make suggestions for credit improvement if needed.

    Second, we need supporting documentation, such as T1 Generals, Notice of Assessments and income verification to name a few.  This assists us in completing the picture, which tells us whether you can or cannot afford the mortgage and/or Rent to Own.

    Next, we look at the amount you can qualify for.  When it comes to a mortgage, you may qualify for 5-20% down, depending on your credit bureau scores and the amount of your down payment.  On the other hand, when it comes to Rent-to-Own, you will require at least 3-5% of the purchase price, which is called a deposit.

    Your deposit is held over to the end of the term and becomes a part of the downpayment.

    Depending on how much the client can afford at the beginning of the term, is a part of determining whether a mortgage or Rent-to-Own applies.

    So who is your typical Rent-to-Own tenant/buyer?  He or she can have a great job, great income, but lack the resources to save the required downpayment; or he or she may have serious credit issues such as a previous or current bankruptcy or consumer proposal; or he or she may have no or low income and cannot save for the downpayment – the point is that everyone’s situation is unique and it is only through a full qualification process that we can assess your particular situation.

    When you are speaking to a mortgage agent about which situation is right for you – make sure you know all the numbers, including, monthly mortgage payment, property taxes, heat and hydro, property insurance, etc.  Don’t forget to attribute 5-10% of your budget for repairs as things always happen when you least expect it.

    Make sure when it comes to qualifying for a mortgage agent or rent-to-own you know which one works best for you!

    (Contact me for your copy of the Rent to Own Procedure Chart)

    To your Wealth!
    Amina

  • 3 comments

    ziDLBG I think this is a real great article post.Thanks Again. Really Cool.

    Reply

    Thank you so much Amina for the information. Please do send me the "Rent to Own Procedure Chart"

    Reply

    Hello Joey, my apologies for not responding sooner - will send that to you immediately and thank you for reading! Amina

    Reply