Frequently Asked Questions
Q. What if I have bad credit?
This is usually fine. We work with clients who have “blemishes” on their credit history to repair their score and help them to qualify for a home at the end of our rent-to-own term. As long as you have the willingness and ability to work on your credit with us, it should not be a barrier to you buying the house.
Q. How much will I be paying per month?
A good rule of thumb for how much you’ll be paying per month is $800 for every $100,000 the home costs. So if the house costs $500,000, the monthly amount is $4000.
Included in the monthly payment is your rental cost, as well as your rental credit amount. Rental Credits are explained in the next question.
Q, What are “Rental Credits”?
A rental credit is the amount of money that you paid to us above and beyond your rent on a monthly basis. If you exercise your right to buy the house at the end of the term, all of your rental credits will be applied back to you to use as a down payment.
For example, in the $500,000 home we described above, the $4000 monthly payment includes $3200 in rental payment, and $800 in a rental credit. If we had agreed to a two-year term, and everything had gone according to plan, then you would be credited back $19,200 in rental credits (in addition to your initial option fee to put towards your down payment).
Q. What is an “Option fee”?
Often times, people are applying for our program because they have “blemishes” on their credit history. This usually means that they were not able to make their payments for one reason or another.
When we are meeting with clients and going over our program we are talking with people who have a new plan and intend to turn their situations around and follow through with the program. However, we need to protect ourselves from the possibility that the tenant will not be able to fulfill their promise of their monthly rental payment.
Once the client picks out the house that they like, they provide us with an “Option Fee” of approximately 4% of the list price at the time we sign the contracts. Once the client is able to purchase the home from us at the end of the rental term, the entire Option Fee will be credited back to the tenant to use towards their down payment on the home.
However, if the tenant is not able to fulfill their side of the agreement, and they need to be evicted or they are unable to purchase the house, then they will have to forfeit the entire Option Fee and all their rental credits.
Q. Where am I supposed to get the money for the option fee?
When you want to purchase a home you should usually have some savings to cover closing costs and the down payment. We can get you started with an option fee as low as 4% of the purchase price. If there are extenuating circumstances and you do not have the full amount of money available, we may be able to discuss other possibilities with you at our first face-to-face meeting.
Q. How is Own Fort McMurray making money in this deal?
As a business, we are intending to turn a profit on this venture. We are, however, looking to create a Win-Win situation for our clients and ourselves. The largest way that we are able to generate income is by sharing in the growth of the value of the home (appreciation) while you are renting it from us.
For example, let’s say we buy you your dream home that is valued at $500,000.
The average home in Fort McMurray has grown in value by 7% each year for several years*. In one year that $500,000 home would be worth $535,000, and after two years it would be worth $572,450. However, we give you the option to buy the house from us at an appreciation rate of 4% per year. So we would give you the option to purchase the home for $540,800. If Fort McMurray homes do in fact continue to appreciate at the historical rates, then you will be getting a great discount off the market value of the home (Plus you’ll be getting your option fee and rental credits applied to your down payment!).
Our profit will be the difference that we are charging you for the home and the amount that we initially paid for it.
Q. What is the Rent-to-Own process?
We will contact you by phone after you’ve completed the online application.
1) After we’ve discussed how the rent-to-own program works and you are interested in continuing the process, we will need you to sign some forms authorizing us to confirm your credit record and income tax information. Once we have an accurate picture of your credit and income tax situation we can create a customized plan for your personal situation.
2) We meet face to face and review your custom made home-buying plan.
3) If you agree that this program is right for you, we’ll help you shop for a home that is suitable to your budget in the neighborhood of your choice.
4) Once you have found a home you would like us to buy, we’ll ask you to review our contracts with a lawyer. Then, if all is to your satisfaction, we’ll accept your option fee and buy the home you selected.
5) You rent the home from us for up to three years while we are helping you improve your finances in order to qualify for a mortgage.
6) After 1-3 years, we help you get a mortgage, and you become a homeowner!
We wanted to thank you again for your interest in our program to help the residents of Fort McMurray get into the homes of their dreams faster than they ever thought possible.
*Based on recent historical rates
That's it! If this is for you, please click here to apply.
