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The Pathway Program
Summary
The Pathway Program is your gateway into a mortgage. This program allows you to rent the home you want to own while working on becoming mortgage eligible. It is for people that are ready to be a homeowner but due to some issue cannot qualify at the moment. Maybe the issue is credit score, a recent divorce, or income verification. Regardless, we purchase the home that you want to own, then lease it to you until you are ready to purchase the home back from us. You can exercise your right to purchase at any time.
If you have to live somewhere while you become mortgage eligible, it might as well be in the home you want to own
Details
Choose any home on the market
Can renew the lease for as long as it takes you to become mortgage eligible, meaning no min or max program length
Lease rate increases by 3% every 2nd year*
Right To Purchase is indefinite and exercisable at any time as long as lease is not in default.
Right To Purchase price is original home price plus 2% if purchased within 6 months, 4% if purchased within 1 year, and 6% if purchased anytime after a year
7% of purchase price is required as Option Consideration, which transfers with you when you purchase the property and can be used as the downpayment for your new mortgage
.1% of purchase price is credited from your monthly payment, if payment is made on time, to reduce the buy back price
*Lease payments can increase by more than 3% to accommodate for unusually high increases in PropertyTaxes or other underlying hard costs.
The Process
1. Apply online -
Once the application has been submitted you will receive an email stating the home price you are approved for. The Pathway Program only runs a "soft" credit check. Soft checks do not affect your credit score.
2. Find your dream home -
with us as your realtors. The Pathway Program will purchase any home you desire so long as it appraises for the purchase price, it is insurable, and you have at least 7% of the purchase price to provide as option consideration money.
3. Pay the 7% Option Consideration -
for the home you picked out. You can fund this through electronic funds or bringing a check into the Berry-Rock office locations. The option consideration is refunded if the offer is not accepted. You have 3 days from the Contract date to fund your Option Consideration.
4. We submit the offer -
and get the home under contract to purchase.
5. Offer is accepted -
Once a contract is in place we get an appraisal and inspection. It typically takes 30 days to close.
6. You then move into your new home!
The Paperwork
The Lease
The lease is a two year term that automatically renews for as long as you are in compliance with the lease and have made all payments under the lease. Our Pathway Program allows you to continue renewing for as long as it takes to become mortgage eligible and purchase the home yourself. The lease rate increases by 3% every 2nd year. Under our lease you are responsible for all maintenance and repairs and you have the ability to make any changes to the home. After all the goal is that you purchase the home soon.
Right To Purchase
The Right to Purchase Agreement gives you irrevocable right to purchase the property at anytime you would like so long as you are in compliance with the lease and are not in default. The right to purchase price is fixed at the total acquisition cost of the home (purchase price plus closing costs) plus, 2% if purchased within 6 months, 4% if purchased within a year, and 6% if purchased any time after 1 year. Customers find our Right to Purchase Agreement attractive because it does not expire and has a maximum amount of purchase price plus 6%.
By The Numbers
$100,000 Home Example
Purchase Price..............................................$100,000
Option Consideration*...................................$7,000
Monthly Payment**.........................................$1,200
Monthly Rental Credit***................................$100
*Option Consideration is 7% of purchase price paid upfront.
**Monthly Payment Rounded to the nearest $10.
***.1% of original purchase price is credited from the monthly payment if payment is made on time.
Monthly Payments
Monthly payments adjust every 2 years at a 3% increase from the previous period. In the example provided the payments would be as follows assuming the client was on our program for the length of time in the example.
YEAR 1-2...................................$1,200
YEAR 3-4...................................$1,235
YEAR 5-6...................................$1,270
YEAR 7-8...................................$1,310
Guaranteed Right to Purchase
The Pathway Program extends a Guaranteed Right to Purchase indefinitely as long as our client is in good standing with the lease requirements. Their clients can exercise their right to purchase at any time. The purchase price is the original purchase price plus 2% if exercised within 6 months, 4% if exercised within a year, and 6% anytime after 1 year, less the amount of option consideration and monthly rental credits incurred. Given previous scenario below are the numbers for the right to purchase.
Right To Purchase Price Example
Within 6 Months | $94,400
$100,000 ( purchase price) x 2% = $102,000
$102,000 - $7,000 (option consideration) = $95,000
$95,000 - $600 (monthly rental credit) = $94,400
Between 6 Months and 1 Year | $95,800
$100,000 ( purchase price) x 4% = $104,000
$104,000 - $7,000 (option consideration) = $97,000
$97,000 - $1,200 (monthly rental credit) = $95,800
Anytime after 1 Year | $96,600
$100,000 ( purchase price) x 6% = $106,000
$106,000 - $7,000 (option consideration) = $99,000
$99,000 - $2,400 (2 year monthly rental credit) = $96,600
Take Action Today And Start On Your Pathway To Homeownership!
