One area where MICs and alternative lenders really shine is in rent-to-own deals.
In fact, MIC’s and alternative lenders are able to uncomplicate the rent-to-own process and get your borrowers on track to a conventional mortgage. This is because alternative lenders have a more options available to them in unconventional situations, like rent-to-own, than do conventional lenders. And borrowers aren’t required to only fit into rigid and unforgiving parameters like with the banks.
These types of deals are typically, and not surprisingly, not favoured by banks and Credit Unions. This is partially because of the way the equity is accumulated. But also because the agreed purchase price may be less than the appraised value.
As MICs, we have solutions to help borrowers get from Rent-to-Own to a traditional mortgage with a conventional lender.
Not to brag but an MIC can be your best friend and ally in a rent-to-own deal:
- First, we will finance the payout of the Rent-to-Own agreement. The property will need to be appraised and the usual borrower credit and income will be required.
- The MIC will then write the mortgage as an open mortgage with no payout penalty.
- Then, when the title is in the borrower’s name, you as a broker, are able to shop conventional lenders for a refinance.
The process to get your borrowers from rent-to-own to conventional financing can actually be fairly straightforward and uncomplicated.
Kokanee Mortgage has programs developed specifically to help renters buy out their Rent-to-Own deals. Our underwriters are able to work with your borrower’s specific circumstances and find a solution that works for everyone. Our decades of experience has given us the knowledge and understanding to craft lending solutions for all types of borrowers. If you have a borrower in an unconventional situation, let the experts at Kokanee Mortgage help you to find a solution.