Not qualified for credit or don’t have enough down payment ready?
Banks can not and will not TRY to understand your situation because this is what they do – they only look at the numbers. Regardless of the years of banking history and being a good customer, banks only see “numbers”. Being a mortgage broker for many years, I have seen many disappointed customers frustrated with their bank when trying to get a mortgage due to strict mortgage rules. But NOW, here is what the program can do for you – Rent To Own – a unique process that we can help you start. It is a powerful kick start to put you on the path to homeownership – today. I will assist you to step by step until you reach your goal.
How much money do I need to have?
Depends on your situation, Canadian banks usually require the borrower(s) to have a minimum of a 5% down payment ready to purchase a property. The Seller wants is to make sure by the time this Rent To Own term is up (either one or two years), the Buyer (you) will have enough of a down payment(example: 5%) to meet the bank’s requirement to qualify the bank’s mortgage. Having a reasonable financial plan for the Buyer to setup the Initial Option Fee & Monthly Option Fee to come up with this down payment requirement. It means is that the combination of an Initial Option Fee and Monthly Option Fee becomes the Buyer’s 5% down payment. Think of it as an initial deposit and a monthly deposit, respectively. It’s much less complicated than it sounds:
Ex: When a house’s purchase price is $300,000, a bank requires 5% ($15000) down payment right away. But with a two-year Rent To Own deal, we can set up a contract like this:
- Initial Option Fee: $10,000
- Monthly Option Fee ($100) * 24 months = $208/mon
- Initial Option Fee + (24) * Monthly Option Fee = $15,000 (which is the Buyer’s 5% down payment)
*Please note: this is separate from any monthly rent to be paid to the Seller*
In 1 or 2 years term
You need:
- provide an Initial Option Fee upon signing the Option Agreement. This fee is secured for your future down payment and is toward the principle of your house.
- monthly rental expenses (rent, condo fee, property tax, utilities) within the term.
- based on the amount of Initial Option Fee, might need additional monthly savings(Monthly Option Fee) to meet the bank’s minimum down payment requirement when term reached.
After term finish
You can:
- Complete the purchase at the agreed price or,
- not to exercise the option to purchase the house within the agreed-upon time frame, but will forfeit the option money.
How does it work?
This Rent-To-Own process involves three parties – a tenant (Buyer), a licensed realtor/mortgage broker (Me) & a landlord (Seller). A tenant enters into a standard lease or rental agreement with the landlord, with the added option of allowing the tenant to purchase the rental property in the future. In this agreement, the tenant’s Monthly Option Fees also act as payments towards the principle of the house. Depending on factors such as the price of the house, or qualifications, the Initial Option Fee is also outlined in the agreement and can range from a few thousand to over ten thousand dollars.
At the end of the term, I will assist in closing the deal between the two parties and transfer ownership.
Step 1: Eligibility
Consult with Peter directly or complete online form. He will assist and assess based on your current financial situation to determine your eligibility.
Step 2: Selection
Peter will find you suitable property from our inventory list or purchase a property with your desire.
Step 3: Contract
Signing the Agreement and associated documentation means that you are now on your pathway to homeownership!
Complete online eligibility form …
Complete this online eligibility form and provide accurate and detail information. Peter will get back to you within 2 business days.