This past month, we had a very nice couple who entered into a “Rent to Own” agreement to purchase their dream home as they did not qualify for mortgage financing at the time they entered into the contract. Following the advice of their lawyer, they gave a large deposit and signed a two-year lease agreement and had to complete on their purchase contract on November 15th or they would have lost their entire deposit plus any additional contribution that was paid during each month of their lease.

Here is where they ran into a problem. What most lenders want to see is that on a Rent to Own Agreement, the deposit on contract must be 100% Refundable and the Rent to Own Agreement must be registered on the title of the property. Without doing so, the tenants are unable to secure financing from 98% of the lenders in the marketplace. Luckily, the property increased in value from the day they entered into the contract and two years later, and we were able to work with the higher value of the property for the purchase.

The landlords were putting a ton of pressure on these poor clients to complete or they would have lost their deposits totaling over $100,000. In order to help them, we used the higher value of the property appraisal to obtain temporary private mortgage financing so that these clients were able to transfer the title from the seller over to them. Our clients were so relieved after we were able to complete the sale of their dream home, but that wasn’t the end.

We understand that private financing is only a temporary solution due to higher mortgage interest rates and payments, once the property was in their name; we contacted several of our lender partners and were then able to refinance their private mortgages into a bank lender that offered market prime rates. By refinancing and consolidating their other bills into the new mortgage, they were able to reduce their monthly bills by over $3,800 per month and total savings of over $50,000 in interest in their first year alone.  

We love sharing success stories like these because we are able to make a difference in peoples lives every day. If you or someone you know is thinking of entering into a rent to own agreement or is already in one, please have them call us first so that we can help protect them as well.