If you are like most homebuyers, you will need a mortgage to finance the purchase of a new house. To qualify for a mortgage, you must have good credit and cash for a down payment. Without these, the traditional route to homeownership may not be an option.
There is an alternative, however: a rent-to-own agreement. In a rent-to-own agreement you rent a home for a certain amount of time, with the option to buy the house before the lease expires. A rent-to-own agreement consists of two parts: a standard lease agreement and an option to buy agreement.
Power of a Rent-to-Own Program
How the Program Works
You provide a down payment (also known as an option consideration) equal to approximately four percent (or more) of the purchase price of the home you are approved to purchase.
What You Need in Order to Qualify for the Program
- You must have a desire to become a home owner
- You must be committed to work on improving or building your credit
- You must have a steady income
- You must have funds saved to begin building your down payment
What is the Application Process and Timeline?
Step 1: Phone consultation with a Rent to Own Specialist
Step 2: Complete application and return it to InnaVative Real Estate with supporting documents
Step 3: Credit analysis and recommendations from our Credit Team
Step 4: Review of RTO numbers and acceptance into our program
We will work closely with you and keep you informed every step of the process. The process takes about 7 business days from your discussion with our Specialist.
I am Interested. How Can I Obtain More Information and Determine if I am Eligible?
Frequently Asked Questions
Most frequent questions and answers
We will rent you a house with an exclusive right to purchase it at a later date for an agreed price. Our tenant-buyers love our program because it gives them time to save for a larger down payment, correct past credit problems or build credit history, sell another home or try a neighborhood before buying in the area. The real estate market continues to grow every year, which keeps many people from saving enough money to buy a house.
InnaVative Real Estate is here to solve these problems by offering you an opportunity to live in your home now, build your credit and save money. At the end of the program, we are obligated to sell the home to you; however, you are not obligated to buy.
NO! You don’t need good credit, but you do need to show you are willing and able to work on re-establishing your credit. Recommendations from our Credit Team may include paying outstanding bills and reducing your credit obligations. Following the recommendations of our Credit Team will help ensure you qualify for a mortgage at the end of the Rent-to-Own term.
Yes. We will always do our best to work with whatever funds you have available; however, a minimum of 4% of the purchase price of the property is typically needed in order to set you up for long-term success.
The down payment you provide becomes the beginning of your savings toward purchasing the home in your name. The down payment for a rent-to-own home is less than you would need to purchase the home yourself and your current credit is not a determining factor for acceptance into our program. Plus, we cover all the initial closing costs to purchase your new home.
Home Purchase Price
Agreed purchase price at the end of the lease period (based on 3-5% annual price appreciation).
(1st year -$416,000, 2nd year – $432,640, 3rd year – $449,945). This amount could be financed with a first mortgage from a bank or other lending company
Length of term depends on your individual situation
Initial Down Payment (option consideration)
Generally about 4-5% of the purchase price pf the home.
Monthly Cheque #1
Rent, Fixed (amount depends on the property price; does not include utilities)
Monthly Cheque #2
Down payment collected for you (amount depends on the initial option consideration deposit)
Total monthly payment
2 cheques required (1st of the month – rent payment; 15th of the month – option consideration deposit payment)
Down payment saved over lease period
($600 x 12 months) x 3 years
Total down payment you own after 36 months
$23,000 (initial option consideration deposit) + $21,600
Your down payment is due before the purchase of your house is finalized. The funds for your deposit must be ready and accessible before you begin looking for a home.
Your down payment is credited to you IN FULL when you purchase your home at the end of the Rent-to-Own term. Depending on the circumstances, if you choose not to purchase your home, your deposit may not be returned to you in full.
Unlike most lending institutions, we accept borrowed funds. If you have a close friend or relative willing to lend you money for your down payment, you can use that in our program.
You make two payments per month. Your rent payment is due on the 1st of each month. You are responsible for paying all utilities plus insurance for your personal belongings. If you choose a home with additional units (a duplex or triplex), you are also responsible for renting out the other unit(s). The second payment is due on the 15th of each month and it goes towards your saving in order to purchase the property at the end of the lease term.
InnaVative Real Estate is responsible for the mortgage, taxes, and property insurance. This enables you to budget and practice homeownership without assuming all of the costs. We will educate you on the costs associated with homeownership. You will feel confident in managing and budgeting for these costs when the mortgage title is transferred into your name at the end of the program.
Every homeowner is responsible for regular home maintenance. From the first day you enter our program, we consider you to be the homeowner. This means you are responsible for maintaining the property and need to get in the habit of budgeting for this.
We work with you and your real estate agent to find the properties that fit your requirements. When you find the right house, we buy the property ourselves or have one of our investors purchase it for you to move into as a Rent-to-Own tenant. Here are some of our simple guidelines:
- Less than 30 years old
- Located in a Canadian city or town with a population of 15,000 people or more
- Must have municipal water and sewage systems (not well and/or septic systems)
- Should be freehold and pre-existing (not condominiums, or in the pre-construction or construction phases of building)
- We specialize in the Ottawa market and the surrounding areas, areas located within an hour from Ottawa –Carleton Place, Almonte, Merrickville, and others
- We have a vision and strong values which guide us in personal life and business
- We offer expertise, education, ongoing support, immediate results, and no surprises
We have many different options; if you need more time we can extend the lease another six months or a year. You can choose to walk away, you will not pay a penalty; however, the money you have paid into the down payment is non-refundable. We want to deal with committed people and we will work as hard as you to help you buy this house!
Renting-to-Own is a great solution for families who currently have good income, but have not had a chance to establish credit history, have had credit issues in the past, and/or are challenged to save the down payment required by a bank or other lender in order to purchase a home. Unfortunately, Renting to Own is not a solution for every family. If you do not currently qualify for our program, please contact us again as soon as you have addressed any issues.