What is the difference between rent to own, lease purchase, lease option and all of the other combinations we see advertised? They all mean the same, you simply have the option to buy the property you are currently renting. All terms are different, however. Ask yourself if you really have a chance of buying your home. Most terms make it difficult and very unlikely that you will actually purchase your home. The most common factor of why lease options fail is simple. The market rental rate accepted is usually 1/2 of the actual mortgage payment. You will probably not be able to afford the mortgage payment if and when you qualify. So why pay an option deposit and risk losing it if you can't afford the mortgage payment? At HP REALTY, we realistically give you the opportunity to buy, creating a win-win situation for both you and the investor. You get a fair deal on a new home while you are on your way to credit healthiness, and our HP Investors have a real interest in your future success while receiving a fair return on their investment. How do we qualify for your RENT TO OWN? We offer easy approval since you will be qualifying two (2) years OR LONGER from now to buy your home, but we do have guidelines. We want to make sure you will be in position to obtain a mortgage, and cash in on the equity waiting for you. Unlike most rent to owns, we don't just take anyone on a NO-QUALIFY basis and justify that by making you pay a large up front purchase option down payment deposit. Of course you don't need to qualify, they have your money! We want premium tenants for our premium low cost HP Rent 2 Own. The following criteria are the qualifying basics: Any bankruptcy must be discharged Judgements, tax liens and other past due accounts must be satifised or on a payment plan A minimum credit score of 580 is preferred www.myfica.com or www.annualcreditreport.com An annual gross household income of $50,000 Farnsworth Property Management/HP REALTY, LLC will perform the following: Review your credit report (Credit Data Southwest) Obtain a national financial risk ranking Employment and income verification Current and previous residency verification Criminal background check How long does it take to get approved and what do we need to do? First, of course, is to make an appointment with us at our HP REALTY office for a short but informative presentation. A simple credit application is needed, along with verification of income and a $50 application fee payable to HP Realty, LLC . (personal check is fine). Farnsworth Property Management/HP REALTY, LLC usually approves you within 48 hours. How do you get the homes for us to lease option? There are 4 different sources and ways we acquire homes for our lease option clients, and this is important to understand. We at HP REALTY purchase homes direct from builders at substantial discounts for our quick move in inventory We at HP REALTY can actually purchase the home you want from the MLS (Multiple Listing Service) We at HP REALTY have investors bring us their homes for inventory because of our reputation of providing quality lease option clients with excellent terms If HP REALTY does not have an inventory home that you want in needed price or area, we can negotiate from any home on the market for sale or rent, providing of course the sellers/owners will accept a lease option contract. *You will also be at the current low market rent* *payment, IF you want to move in with this non-mortgage low initial rent payment.* In this current buyers market, many are accepting lease options. The SERVICE COMMISSION FEE payable to HP REALTY, LLC is $1,000. Our CONTRACT SYSTEM will make sure you have a legitimate lease option in escrow and our negotiating experience and knowledge of the lease option business will save you more than this commission by reducing the market standard purchase option deposit of $5,000 or more, depending on the value of the home. We know what we are doing! How much down payment is needed to move in when you buy the home for us? Very low down! Here at HP REALTY *, WHEN WE OR ANY ONE OF OUR INVESTORS BUY THE HOME FOR YOU, IT IS A NOMINAL $2,000 PURCHASE OPTION DEPOSIT* . Total money down needed to move in is simply your monthly payment times two, plus the $2,000 non-refundable option deposit. Now, it is very important for you to know how we make our money. Our income is generated by a *sales commission* from the home our HP REALTY investor buys for you. It does not come out of your pocket. Our service is free to you, and we all benefit from and want you to purchase the home after two years. If your payment is $1200.00 per month, $2400.00 would be needed, with half being your refundable security deposit and the other half being your first month rent. Your purchase option of $2,000 is non refundable and your option to buy is included without any additional deposit required. This is a low cost, minimum cash out of pocket move in with an affordable monthly payment required compared to all other rent to own companies. How much down payment is needed if you negotiate a lease option for us on a home through MLS or any other home available on the market? Your down payment will usually be more on an open market lease option than the nominal $2,000 with an HP REALTY new purchase, but keep in mind we are very experienced and successful at negotiating a lower than market option deposit which is usually $5,000 or more, again, depending on the home value. We can very often in this current buyers market, negotiate a very attractive future purchase price for you. How does your 50% - 100% rent credit rebate work and how do we know for sure we will have it when we buy our home? This is what separates HP REALTY from the rest! 50% TO 100% of all of your monthly rent payments made on time for your entire two (2) year lease is credited to you at the time you purchase your home, no restrictions, no ifs ands or buts. If you buy the home, it is credited to you. This is locked into both your lease and future purchase contract, providing the following: Gives you the money needed to cover your down payment and closing costs at purchase. No need to worry about saving, it is forced savings for you and returned to you by the investor at escrow! This can add up to thousands. Do the math! $1,200 x 50% = $600 x 24 = $14,400. If you do not excercise your purchase option, you leave your rent credit and possible equity behind. Very few of our clients do not go on to purchase, the opposite of most rent-to-owns! The money from your rent credit will be there for you. Your only priority should be to improve your credit score if necessary, to obtain the best mortgage for your home purchase. www.myfica.com or www.annualcreditreport.com What price do we pay for the home when we purchase? This is the other winning factor and what separates HP REALTY from the rest. We offer a pre-set purchase price calculated below current annual home appreciation. You actually by contract, have this future purchase price waiting for you in escrow at a major title company. If the home prices continue to go up, you could have thousands in equity above your pre-set purchase price. This surplus is your additional equity in your pocket. You actually have nothing to lose and everything to gain! Let the home appreciate, let the market crank up, it is in your favor. You are now protected from excessive market increase! Most rent-to-owns simply appraise the value of the home at the time you buy. The home prices are increasing too much or really, what is the difference between renting and the appraisal lease option. You are going to pay exactly, or more for the home anyway. When you enter a market value lease option, you are not gaining anything. Only risking your option deposit, and more than likely losing your purchase option deposit for not buying the home because it went up too much! This is the reason most tenants do not go on to purchase: The price is too high and they can't qualify for the high mortgage. Also, most rent to owns allow you to pay actual market rent during your lease option. When you try to purchase the home and realize your REAL monthly mortgage payment is MUCH higher than your rent payment, you will probably not buy! Do not believe you are in a true rent to own if it is not affordable! You need the HP REALTY pre-set purchase price to know what you will have to qualify for and the opportuninty to gain equity. If the appraisal comes in higher than your pre-set price, it is your money. The future purchase price is calculated from the HUD statement (actual price paid by investor including closing costs). How long does it take before we can move in? We have two time periods depending which way you choose your home. If we have an inventory home that is perfect for you, it can be less than 7 days. If you choose to have HP REALTY purchase any home (HOA /2006 built or newer) on the MLS market for you, escrow must take place and move-in time would be about 45 days. What will be my monthly payment if I want a $250,000 home? Our monthly payment factor is based on the mortgage payment of the home we purchase for you. This payment would be the same or lower (because of our high credit buying power) than you would have if you actually purchased the home. Unlike most lease options that charge you low rental market payments with large option deposits, then when you convert to a mortgage, your payment is twice your rental payment. Converting to a mortgage payment you can afford will not happen! We want you to have the ability to pay the mortgage payment now. If you can afford to do this, you will be able to afford the payment when you secure your own mortgage. We want you to actually buy the home! This is why most of our clients go on to purchase. Your initial monthly payment is very realistic to your future home mortgage payment. A payment on a $250,000 home would be approximately $1,500 per month. (calculated using a 7% mortgage interest rate on home price to establish monthly payment) Your monthly payment when quoted will be based on a certified appraisal for inventory homes and by the HUD statement (actual price paid for the property including closing costs) if a new market purchase. We will calculate your approximate monthly payment based on the home price during our presentation. Market conditions change, we change with it. Once you lock in your monthly payment, it will not change during the entire two (2) year lease. Can we have you buy our new home direct from the builder? Possibly, some builders are allowing investor contracts at the present time, inventory homes specifically, because they want to sell them ASAP! The builders are so anti-investor, they will not allow investors to buy their homes normally. This is why the homes you have to choose from are limited from the builder, however, we at HP REALTY have purchased several new homes directly from the builder with substantial discounts. We are passing these discounts to our clients, YOU. We can also buy new homes from the MLS (Multiple Listing Service), and even though they are considered resale homes, many are brand new and never been lived in. You have hundreds of homes to choose from the MLS. Many are brand new and never lived in, and with the new builder warranties still in affect. Do we have to pay any Home Owner Association dues or property taxes? No. Taxes and HOA are paid by the investor/owner of the property. You will have privacy, since you are leasing, there will be no public record of where you live. When you buy your home 24 months from now, you will then enjoy the rewards of homeownership by paying property taxes, HOA fees, etc. Enjoy your freedom for the next two years! Are we forced to buy the house after the two year lease? No, you have total flexibility. You have the option to buy, not the obligation. However, again, your 50% rent credit rebate will obviously not apply to a mortgage and will be left behind if you do not purchase. We have HP REALTY affiliated lenders to help you obtain the best possible financing to indeed buy your home. You are free of course, to use any lender you perfer. Do we supply our own appliances if the home we select doesn't have them? Absolutely not! If you have them, fine. HP REALTY and your investor not only provides a washer/dryer and ice making double door refrigerator, but also a garage door opener and window coverings if any of these items are needed. Keep your cash in your pocket, and don't worry about being house poor! Just move in and enjoy everything new! Can we do your RENT TO OWN process with a townhome, condo or patio home? No, HP Realty, LLC only offers our RENT TO OWN process for detached single family homes. These new single family homes provide a higher appreciation of all the home types, making it the best investment for you and your family as well as our investors. We do however, from time to time, have an investor owned property such a patio home come into our inventory for quick move ins. HP REALTY Investors only purchase 2006 and newer single family detached homes by a major builder with a HOA (Home Owners Association). These new homes have builder warranties, eliminating many repair problems of renting and future homeownership. Newer is simply better for everyone involved. Move in and enjoy your new home, as maintenance free as possible!