Understanding your monthly payment

Your monthly payment with Divvy’s rent-to-own program looks different from traditional renting. Let’s take a closer look at how payments to Divvy work.

How does my monthly payment work?

Your monthly payment includes a key part of Divvy’s rent-to-own program—home savings!

Home savings: A portion of your monthly payment (about 25%) that gets set aside. These savings build over your three-year lease, enough for your mortgage down payment.

Every month, you make a single payment to Divvy, including your rent and home savings. Those savings get you closer to homeownership each month. Our program is designed to help you save for a 5-10% down payment—enough to qualify for most mortgages.

Why does my monthly payment look high?

There are a few things to understand about your monthly payment. It has two parts, which will be determined by your income and financial history, as well as your home’s features and location. Here’s a breakdown of your payment’s components:

  1. Fair market rent—this usually makes up ~75% of your monthly payment. We price each home individually and look at rental rates in the area, the home’s features, and locations to find the fair market rent price.
  2. Home savings—usually about 25% of your monthly payment. During your 3 year lease, your home savings will grow and be enough to cover your mortgage down payment.

Because your monthly payment includes more than just rent, it can look a little expensive when you first see it. But your home savings are yours—that money is yours to keep, even if you walk away. All Divvy takes is a fee of 2% of the home’s value, this is to cover the costs of selling your home if you choose not to buy it.

Get closer to homeownership with every monthly payment

Your home savings help you get mortgage-ready by preparing you for your mortgage down payment. Depending on your financial situation, your home savings will build to 5 or 10% of your home’s purchase price during your three-year lease. Most mortgages will ask for a down payment of 5-10% of the home’s value, so you’ll be ready to qualify!

Your monthly payment can also help improve your credit score—we report monthly payments to all major credit bureaus, so on-time payments can help you increase your current score!

When qualifying for a mortgage, lenders also want to see that you’ve been able to save on top of paying your monthly expenses, like rent. By automatically putting aside savings through your monthly payment to Divvy, lenders will see that you’ve been able to save while managing your expenses.

Ready to jump into homeownership with Divvy? Apply today!

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