Thinking about a rent to own home but not sure how it all works? You’re not alone! A lot of people have questions about the process, from how payments work to what it takes to eventually own the home. Rent to own can be a great option for those who aren’t quite ready for a traditional mortgage but still want to work toward home ownership. In this blog, we’ll break down some of the most commonly asked questions about our Rent To Own Program, so you can decide if it’s the right fit for you.
Rent to Own Program Qualification Questions:
Do I Qualify for JAAG’s Rent to Own Program?
At JAAG Properties, we understand that not everyone fits the traditional home buyer mold, but we believe everyone deserves the chance to own a home. If you have a stable job, a 3% deposit, and need assistance overcoming the hurdles of purchasing a home, you may qualify for our Rent to Own Program.
Do I Qualify for Rent to Own If I Have a Past Bankruptcy?
Yes. We have a full credit team that will work with you throughout the Rent to Own Program to increase your credit score to the level the banks and lenders require. We have set up our credit team in order to work with the people that are currently in bankruptcy or consumer proposal or have gone through this in the past. Our credit team will perform a credit analysis, which will outline what needs to be done and the actions you can take throughout the program to achieve success. If you are willing to work with our credit team to improve your credit profile, your credit score today will not be a deciding factor for our approval.
Do I Qualify If I Am Self Employed or Own My Own Business?
The answer is yes. We work with several individuals that are small business owners or self-employed and help them claim their hard-earned income properly so that they can qualify for their own mortgage.
What are Some Reasons I Might Be Declined for the Rent to Own Program?
There are two main criteria that we look at for approval in JAAG’s Rent to Own Program, deposit and income. If you have 3% of the purchase price saved and stable income, you will be approved for JAAG’s Rent to Own Program. You need to ensure that you’re able to make the payments towards ownership of your home as well as your current expenses. If you are willing to do that, then you are able to qualify.
Rent to Own Process Questions:
Who Chooses the Home in a Rent to Own Agreement?
You get to choose your own home, the area, and amenities that you want to be close to. Our Rent to Own Program is set up the same way as if you were going through the home buying process yourself. JAAG Properties does not inventory any homes that you have to pick from. We are approving you for a purchase price. Then you will work with a realtor to find the home that best fits your criteria. Once you select the home, we start the offer process, complete a home inspection with you and buy the home. The only difference is we are on title. Once the Rent to Own Program is successful, the title goes in your name, and you are officially a homeowner.
What are Some Reasons a Property Might Not Be Eligible for the Rent to Own Program?
There are only a few reasons JAAG Properties might not approve the specific home. These include:
- The property is too rural, and a higher deposit is required
- The property is in a state of disrepair and needs too much work
- Your income level does not support the purchase price of the home
Is a Home Inspection Required for Rent to Own?
Yes. We require a home inspection on all the properties that we purchase. You are responsible for the payment of the home inspection and that’s usually between $400 – $500 and done by a professional home inspector. The goal of this inspection is to ensure the home is in good condition and free of any hidden problems in all major areas, like roof, electrical, plumbing, heating, and cooling.
How Much of a Deposit is Required to Rent to Own?
The minimum deposit to qualify for the program is 3% of the approved purchase price. For example, if the approved purchase price is $500,000, the minimum deposit that you’ll need to qualify for the Rent to Own Program is $15,000.
How is the Future Purchase Price of a Rent to Own Home Determined?
A few factors come into play when determining the future purchase price:
- Today’s Fair Market Value of the Property. When a client identifies a desirable property, JAAG Properties will purchase the property based on today’s market value or a price the seller is willing to accept.
- Length of the Rent to Own Term. Based on the area of the province and property type, a conservative annual appreciation rate is determined based on historical market data. For instance, if the market suggested an annualized appreciation rate of 7% – 10%, we will use 4% – 5%.
- Approved Mortgage Amount. The approved mortgage amount from our credit team verification that at the end purchase price will be within the expected mortgage budget provided by the mortgage expert.
What are the Benefits of a Pre-Determined Future Purchase Price?
Some benefits of a pre-determined future purchase price, with a fixed future purchase price, the problem of market volatility is removed, and so is the uncertainty on affordability in the future. A fixed purchase price means a fixed down payment amount, eliminating the problem of trying to catch up with rising home prices. As the market appreciates above and beyond predetermined purchase price, our clients will be building equity throughout the Rent to Own Program.
Am I Allowed to Renovate the House?
Yes. You can update and renovate the home as you see fit during the program. We want you to make that house your home, because it will be at the end of the Rent to Own Program.
Who is Responsible Maintenance Payments During the Rent to Own Term?
You will be responsible for all the upkeep, maintenance, and ongoing issues of the property. Our program is not just renting to own, but instead a home ownership and training program. You will directly benefit from any improvements that you make from the home, such as renovations as it will increase the value of your home. And, of course, all homes need regular maintenance and ongoing issues happen. It’s important to budget accordingly and keep this in mind throughout the program. When you choose your home, it will be inspected by a certified home inspector, and you will know exactly what is required for that specific home and decide if you’d like to proceed.
Are the Property Taxes and Insurance Included in My Monthly Payments?
Yes. The monthly payments you make to JAAG Properties will go towards the mortgage, property tax, and insurance, as well as the monthly credit you will require for your full down payment. Throughout the entire Rent to Own Program, the monthly payment is automatically set up for the first of each month.
What Happens If I Don’t Qualify for a Mortgage at the End of My Rent to Own Term?
If you are unable to qualify at the end of the Rent to Own Program and have made all monthly payments on time, we will extend the rent to own term until you can qualify. We set up all of our rent to own programs to work with individuals and families to own their home.
Start Renting to Own with JAAG Properties
Choosing a rent to own home is a big decision, and it’s natural to have questions along the way. At JAAG Properties, we’re committed to making home ownership more accessible by providing clear guidance and support throughout the process. Whether you want to understand the financial details, eligibility requirements, or how the transition to ownership works, our team is here to help. No question is too big or small—we want you to feel confident in your decision. Get in touch with us today to learn more!
