The process works similar to leasing a car. Our program offers families that have a portion of a down payment and poor credit a chance to move into their dream home today without having to qualify for a mortgage loan. In addition, a small portion of your monthly rent and your initial down payment goes towards the purchase of the home. Our program helps homeowners save thousands of dollars in a 3-year lease that is used towards the purchase of their home. It’s that simple.
Rent to Own is the next best solution for first time homeowners. Unfortunately, there are individuals that take the misfortunes of others to make a profit and don’t create a win/win situation for the renter. Here are some warning flags that will indicate a rent to own program may be a fraud or scam.
No minimum household income – to succeed at the Rent To Own program, your household income should be a certain level to take on a mortgage after the Rent To Own program is over, and the mortgage needs to be paid. If the company offers a rent to own program without asking or seeing what your household income is, it seems as if they are preparing you for failure without making sure that you can afford the mortgage payments after the program is complete.
Low Option Deposit less than 3% – the option deposit is very important to the Rent to Own Program – the reason for the option deposit is to guarantee to the rent to own tenant that at the end of the program, they will have a large enough down payment to afford the property and to be able to make the mortgage payments at a reasonable price. The better the down payment, the better the monthly mortgage payments.
No Income Verification – for the company to not verify your income almost sounds as if they do not have your best interest in mind. To afford the payments after the mortgage, you would have to have a certain income amount to make continuous and on-time payments. Without the company verifying this, it seems as if they are interested up until they allow you to take over the mortgage payments under your name and do not care if you can afford it or not in the long run. If your income is less than 60,000, mortgage payments may be hard to continue, but the company will be out of the picture and would have benefited from your payments in the lease amount and not after. They have already received their payments, and seem to be not concerned with your well-being and home ownership.
Scams – low deposits/no restrictions on property/no dedicated RE agent/ no talk of credit repair/no use of mortgage agent/no approval process/non-realistic buyout prices/ not using any type of appreciation percentage/higher than normal rent/ pushy salesman tactics/not allowing you to verify docs with people you trust/ wanting a deposit but docs don’t discuss a deposit/ pushy for deposit (where is the money)/ not worried about a win-win solution/ no references
Some fake companies could say that they participate in a Rent To Own program, but could be a fraudulent company to take more out of a family when they don’t’ have much in the first place. It is sad, but fraudulent companies are everywhere. Whether it is with Renting to Own, online programs, or over the phone. I wanted to discuss ways to find out if a Rent to Own program is a fake or not. It will help you in the long run to save money and heartache in this process.
Some tips to figure out if a Rent To Own (RTO) program is a fraud, is if the company deals with a mortgage agent or a Real Estate Agent. A mortgage agent will assist you and work with you to have you be financially prepared to get a mortgage after the RTO term is over. They will assist you with getting you a mortgage that you can afford and you can benefit from. They will have your best interest in mind. A Real Estate agent will help you find your dream home, that is affordable, and similar to what you are looking for. They will work with you and your mortgage agent to find the right house that also fits in your budget. They wouldn’t try to get you into a house that you will not be able to afford and have the chance of you losing your home. They should be there to help and guide you on this home ownership journey