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"Owning a house is something I never thought I could do. After renting through HELP, I now own my own home and have $40,000 in equity." Ken - Boise, ID
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Tired of paying rent?
We make it easy for you to move from rent to own.
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(208) 938-4032
Call today for HELP to move from rent to own. |
What is the HELP Program?
The Help Program is a lease-to-own program. In a lease-to-own (also known as "rent-to-own" or "lease purchase") you lease a home and have the choice to buy it at any time during your lease period. Although we technically “own” the property at first, we are bound by our agreement to sell the home to you at a price that you agree to at the beginning.
You will sign two contracts: the first is a typical lease agreement. It is the same basic contract you would sign when renting an apartment. The second is a Purchase Option Contract. This contract commits us to sell the home to you at an agreed upon price. It is a unilateral—or one-way—contract. The contract states that we have to sell when you qualify for a mortgage, but if, for any reason, you don’t want to buy, you don't have to. For most of our clients, the Purchase Option typically expires after one year. At our expense, we hire credit repair specialists to help you repair your credit and qualify to purchase the home within that year.
How much will I have to pay out-of-pocket?
HELP will require a $2500 purchase option deposit. This will be refunded to you when you purchase the home from HELP.
Almost all such programs require an “option consideration”— typically 1% to 5% of the agreed upon purchase price (on average between $2,000 and $10,000)—to secure the Purchase Option.
Programs that charge this fee claim it compensates the owner for taking the property off the market and guaranteeing a future price to you. Although this money will be applied as a reduction to the purchase price at the time you decide to buy, it still prevents many people from being able to participate in a lease-to-own or rent-to-own program. Therefore, the HELP Program does not require an option consideration. In fact, even when you purchase the home from us, you don’t have to come up with a down payment. We typically structure the deal so you never pay more than a standard monthly mortgage payment.
Why Would I Want To Use The HELP Program?
There are several reasons to use The HELP Program
- You can't qualify for a mortgage yet, but you don't want to waste money on rent.
- You need time to fix poor credit but don't want to let more time slip away while you work on your credit (because the longer you wait the more expensive houses become).
- You can qualify for a mortgage now, but don’t have money for a down payment. The HELP Program helps you avoid coming up with a lump sum for a down payment.
- You can qualify for a mortgage and have money for a down payment, but want to invest that money somewhere else rather than sink it into a down payment on your home. (Perhaps you want to purchase another property you can rent to someone else.) Using The HELP Program you can put your lump sum to more profitable use and still get into a home that will eventually be your own.
If I lease a home from The HELP Program, won’t my rent be higher than normal?
No. Most rent-to-own programs will charge higher than market rent, and use that extra money to cover the closing costs of the house. Not so with The HELP Program. With The HELP Program, you pay the amount equivalent to your mortgage.
Rather than charge you extra cash each month and apply it toward your down payment, we encourage you to use that money to repay creditors. This will help you improve your credit score and qualify to purchase the home sooner. Using the “extra” money this way is more beneficial to you and doesn’t go simply to line our pockets.
So how does The HELP Program make money? There’s no such thing as a free lunch.
You are right. We have to make a return on our investment. Our profit comes in the difference between our purchase price and the amount for which we sell the house to you. For every one of our clients, however, our profit has been offset by the home’s appreciation.
For example, let’s say we purchased a home for $200,000, and set the Option Price to you for some amount above that, say, $220,000. Our profit is the difference. However, in every single case, our clients’ homes have appreciated above the Option Price by the time they purchase the home. For example, at the time you purchase the house for $220,000, it is actually worth $240,000. You already have 8% equity in the home. Sure, we make a profit, but you just purchased a home 8% under market value. You could turn around and sell it the next day for a $20,000 profit (though we wouldn’t recommend doing so because closing costs and taxes would dramatically reduce your profit).
The point is that we don’t make our profit by taking it from you. You actually come out ahead because of the home’s appreciation during the lease period.
So what if I use The HELP Program, but end up deciding not to buy the home?
Occasionally, that happens. People get married, get a job in another city, or for some other reason don’t end up purchasing the home. What’s the downside? You may have paid slightly more for a HELP Program home than you would have for an apartment. But…
If you don't buy the home, you basically did nothing more than rent a quality new-construction home. Again, in almost every other rent-to-own program, if you don’t buy, you lose your option consideration. Because we don’t charge that fee, you aren’t out any money. The down-side of using The HELP Program is minimal and the obvious upside of the Purchase Option is huge.
How can I be sure that my credit will be good enough to buy before my term expires?
You are asking some great questions. The first answer is that we won’t accept you as a client if we don’t think you could qualify within a year. We want to sell the home to you, get our return on investment and put our money back to work. We don’t make any money simply renting a home to you. Unlike most rent-to-own programs, The HELP Program doesn’t charge an Option Consideration fee and we don’t charge a large premium on the monthly rent. We want to see you succeed.
We hire (at our own expense) a credit repair specialist to help you repair your score. In addition to living in a great house, with the option to purchase it outright, The HELP Program also leaves you with an improved credit score. We typically qualify clients for their own loan within twelve months of joining The HELP Program.
Third, getting your credit repaired is largely up to you. Be responsible. Don’t open any new accounts, don't make any additional debts and DON’T MISS PAYMENTS ON YOUR HOME or do anything else that will hurt your score. At the same time, to help your score we’ll report on-time payments and may help you open specific credit lines that will have a positive impact on your score.
Is there any way I can foul this up?
Yes. There is a great way to ruin everything for yourself. Although it may seem crazy for someone in the process of repairing their credit, purchasing their own home, building equity in a nice piece of property, and getting ahead financially to shoot themselves in the foot, it does happen when people don’t pay their lease payments.
Don’t miss your lease payments and don’t do anything else to get yourself evicted or further damage your credit. These are really the only ways not to end up owning your own home through The HELP Program. If you think you may be inclined to do that, please don’t call. Other than that, we look forward to working with you.
Please contact us at 208-938-4032. |
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