Frequently asked questions
Equity Enhancement Program
A question that we get quite frequently is, how exactly does your equity enhancement program work, and how do I take advantage of it? Well, as a disclaimer, the equity enhancement program isn't for people that have no money down or use the program to get a down payment. That's not what it's used for. However, it is a great way to pick up free equity. It would be anything above your current scheduled down payment. Now, that's anywhere from three to 10%. But that could be up front and overtime. If you have a higher down payment closer to that 10%, it gives you a better chance of picking up any rent to own home that you're interested in.
In the case you'd have over 10%, we would then take the home immediately off the market. For example, say you want to throw an extra $200 towards your down payment, not only can you do that, but we will also credit you 50% of that towards your down payment. Now that's not mandatory. It's totally optional, but it's a great way to pick up free equity. We do a cap on these extra payments at $500. But over the course of a 36 month period, that could be potentially $9,000 in credit off the purchase price. When you take advantage of the equity enhancement program, scheduled down payments, and put the down payment up front. It will put you in a better position to get your own loan.
Getting Into a Home with 0 Down
A question we get all the time is, can I get into one of your homes with no money down? Well, simply, the answer is no. Unfortunately, you can’t get into any of our properties with no money down. Now, the main reason here is returning over an asset to you. So, number one, we want to make sure that you're able to support the home. So, usually, our homes require anywhere from three to 10%. The more you have up front, the better. It's going to improve your chances of being accepted because you're in competition with other buyers.
Now, what some of our buyers will do to get closer to the 10% mark, is use a 401k or retirement account, savings, gifts from family and tax returns. Your down payment is going to weigh heaviest. It's something that we look pretty strongly at when we're considering who to accept. Let me explain. If we were getting you into a home with zero money down, then the chances of you getting to the point where you'd be able to get your own home loan is not very high. So, we want to set you up for success, that's our most important thing we're looking at. We want to make sure that you're going to be able to get your own home loan.
How Can I Enhance My Credit?
A question that we get asked quite often is, I'm in a rough position, can you guys help me enhance my credit? Can you help me with that? Absolutely, we can and that's what we specialize in, getting good people like yourselves into homes, and getting their credit enhanced to the point where they are credit qualified for a loan. You're going to want to talk to either myself or my twin brother about the whole process when you're getting started. And we'll make sure that we're guiding you along the way. But we're going to set your expectations, we want to make sure that you understand that you have time here, guys. So, it's not something that we're going to set up your lease. And then at the end, you're going to need to qualify, we're going to give you a lot of time if you need it. Sometimes two, three or four years to get qualified for your loan. So, you have options, and you have time.
Now, the specialist that you're going to get hooked up with is MyCreditTeam.com. You can go on there and check that out. It's a husband and wife team, Paul and Joanne Ritter. They're going to give you a free consultation. And really, the main thing that we're looking for here is how long is it going to be before your mortgage ready, or if it's possible. Remember, we never want anyone, we never want to set up anyone to fail. So, we want to make sure that we're setting you up for success from the very beginning.
Now, it's only $99 per month once you're in one of our rent to own properties. Or you can even be proactive and get started with the credit enhancement before you find a home. That'll just increase your chances of being accepted if you're already working on it. So, it's $99 for six months. They can do it in six months cycles to let the credit catch up. But frankly, to be candid with you, everywhere else that I look in the credit enhancement industry, I don't know how MyCreditTeam.com does what they do for so little. For $99 a month, it's really quite outstanding.
So, if you guys have really ugly stuff in your credits, such as bankruptcies, foreclosures, that kind of thing; you can actually talk with us because there are considerably more expensive programs that we can recommend for those kind of situations. But as far as the tenant screening, we always recommend calling Paul and Joanne Ritter. We look forward to partnering with you and enhancing your credit so that you can become a homeowner.
How Rent to Own Works
A question we get often is how does the rent to own program work? So, you may be thinking, who are the people that need the program? Our buyers tend to be those who are self-employed, make a stable income, and maybe they just need what banks call seasoning. So, they need a period of time in order to become more gigs ready. It could also be somebody who had a legitimate hiccup, in their credit, gone through a serious life event, like a death, a divorce, maybe even a bankruptcy, and you generally just need time in order to become mortgage ready. If you fall into one of those categories, or you fall into a category that we didn't mention, and your credits less than perfect, we can help you with that. We'll get you connected with a great credit enhancement company, that's going to get back to us and give you a specific strategy on how to enhance your credit to get it to a point for your mortgage ready. That way, you can become a buyer. We like to call it a tenant buyer. It's someone that ends up being a homeowner.
So, these are some steps, they're going to help you get there. First, you're going to want to jump onto our website and register for our properties. It's absolutely free. We're not doing any credit checks or background checks. It's just for our internal use. We want to make sure that when a property becomes available, you're the first to know. All of our registered prospective tenant buyers get a first look before we advertise anywhere else. Let us know if there's a home you'd like to see, and we'll set up a viewing.
In the case you're interested in moving forward, the property will move to the second step and send you our next step forms. They're going to tell us more of a big picture of who you are as a buyer. So, we're going to know your job, your income, what your down payment is. That way we can see if our program is going to be a good fit for you to buy the this property. Once we get the forms back, we'll give you a call to review them. And then once we get to a point where we're both comfortable with your plan, we'll move on to step three and arrange a buyer meeting. The purpose of a buyers meeting is to meet face to face, go over a simple buyer letter of intention, outline your steps for success, and then go over your down payment plan.
Generally, the deposits fall within three to 10%. Because the whole goal is to get you to the point where you're not only mortgage ready, but you have access to the best available programs. We've had buyers use liquidity from their 401k or retirement accounts, use work or quarterly bonuses that they can contribute from. The best part about the down payment is it's completely credited towards your purchase price. So, every single dollar that you put into the down payment is actually coming off the purchase price, making it easier for you to get mortgage ready and be able to close and become a homeowner.
Remember, our whole goal here is to get you to the finish line, so we want to make sure you're set up for success. To bind the contract, we’ll then need what we call a binder deposit. Typically, it's around $1,000. But if it's a larger home, and maybe upwards of 2 to $4,000, that's fully refundable. If you're not accepted. Usually, acceptance into the program takes between three to seven business days, and then you can sign with our attorney.
What Expenses Can I Expect?
A question we get quite often is, what kind of expenses can I expect whenever I buy a home through your rent to own program? You're going to have all the normal expenses that you would just like when you're buying, except there's no long wait period for the closing. There's also no closing costs until you get your own loan, and no costly commissions to worry about. Now, you're going to be running the home exactly like it's yours. You're taking over responsibility for all maintenance and taxes. It's not a typical landlord tenant relationship.
Now, what's interesting about the taxes is they're included in some of our homes, but not all. So, you should always ask us whenever you're inquiring about one of our rent to own properties. Now, another question is, once I'm in the home, can I do certain improvements, can I improve the property? Yes, absolutely. For example, we had a family install a brand new HVAC system and generator. And then in a separate case, we had buyers put in furnaces and other improvements to the property. Remember, all these improvements and subsequent increases in equity you're gaining in the improvement of the property, not us, it’s to your benefit.
What If I'm not Able to Get My Loan at the End of the Lease Purchase Period?
The question that I've heard a lot recently is, what if I'm not able to get my loan at the end of the lease purchase period, because I put a deposit down, it's non refundable, and it goes towards the purchase price? The answer to that is we get you pre screened before you're accepted. So, we know exactly how long it will take for you to become mortgage ready. The screening covers credit and a complete background check, including criminal history and sexual harassment. There’s no guesswork in this report. We know by following a prescribed system of steps and actions that we can get you mortgage ready in a specific period of time. It's a 20 plus page report. So, we review that and as a team, decide if we want to move forward or not.
How does this relate to if you're unable to get a loan at the end of your lease purchase period? The company that pre screens you MyCreditTeam.com, gives us a report, which tells us this particular client can be mortgage ready in 12 to 18 months, or 18 to 24 months. Whatever they tell us, we create a lease, which is for that period, plus a little bit more. We round up, plus a six month extension. The six month extension in your contract will basically say if you've done everything in your power, and you've done the credit repair steps, and you've done the program with Paul Ritter's team, and it's a very simple program, it's just following the steps and you're still not there yet at the end of your lease purchase term, then you get an automatic six month extension. So, some of the credit screenings, I'll get back, and it says this person will be ready in 12 to 18 months. But we're at a 24 month lease with an additional six month extension.
So, they told me 12 to 18 months that you can get it done and I'm giving you a 30 month lease. There's always a buffer. Our intent is to set you up to succeed not to fail. Having said that, the Paul Ritter's team came back with a report that said that you need five years to become mortgage ready, then we won't move forward if we don't have a home that can fit that timeline. I hope that helps guys. It's a process that sets you up to succeed, not to fail. So, the answer is we won't have that concern at the end.
Now there's one exception to this. You've got to do what they tell you to do. They send you about a batch of letters and tell you to sign it and they tell you to mail them. It's all pre-done for you, but you have to go through with the steps. If you do that you can't fail. If you don't do that, then you're actually in default of your own agreement, so it's a moot point. I hope this helps guys and if you have any questions feel free to contact us through our website.