By now we have all heard that there are new mortgage rules.** The intent of some of the new rules is to ensure that homebuyers can handle an increase in interest rates—essentially a stress test. However, this means that many first-time and high-ratio buyers will no longer qualify for the mortgage amount they want. If you fall into either of these categories and still want to purchase your own home, we may be able to help you with our Rent to Own Program.
When you participate in a Rent to Own Program, you rent or lease the property until you exercise your Option to purchase it. This lets you enjoy the benefits of living in your own home sooner, especially with the new mortgage rules.
Here are some great benefits:
- You Select Your Own Dream House
You get to choose a house that you will love to call home! No more renting!
- Never Have to Move Again
You will be able to settle into a neighborhood that you love and establish long-term relationships.
- No Initial Bank Qualifying Required
Banks have strict lending guidelines that prevent many applicants from qualifying for a mortgage. As long as you have reliable income to support the monthly option payments, rent payments and are able to provide an Initial Option fee, then you are on your way to qualifying for our Rent to Own Program.
- Minimum Cash Up Front
While there is an Initial Option Fee required, it’s 100% credited towards your future purchase of the property.
- Flexible Lease Term
The lease is typically a 1 to 3 year term. This works to your advantage as it provides you with time to establish or restore credit and save up a larger down payment. You will work with our associated mortgage professionals to determine the length of term you’ll require.
- Guaranteed Final Purchase Price
Your final purchase price is an estimate of the future value of the house at the end of your lease term. It is set at the start of the lease term and is guaranteed. If your property is appraised higher than your Lease Option price at the end of the lease term, you benefit from the additional appreciation.
- Improving Credit
You are improving your credit while you are making payments toward the future purchase of your home. The lease term gives you time to repair or re-establish your credit if required.
- Establish Employment History
If you are a small business owner / self employed you will have time to establish an employment history. Most banks require 2-3 years to do this if you are self-employed.
- Building Down Payment Over Time
An Initial Option Fee is required at the start of the lease term and is credited towards the future purchase. The Monthly Option Payment will be credited towards the purchase as well. This allows you time to save for your down payment over a period of time while enjoying the benefits of your new home.
- Fixed Monthly Payments
Your monthly lease payments are fixed for the term of the agreement and include:
- Rent payment
- Property taxes
- Building insurance
- Condo fees (if applicable)
- Option credit
You are required to set up and maintain your own services/utilities such as electricity, gas, water, sewer, garbage, recycling, and personal contents insurance as well as optional utilities such as telephone, cable and Internet.
- Flexible Financing
When you are ready to exercise your Option to Purchase we will help align you with a certified mortgage professional who will work with you to find the best mortgage for you.
- No Obligation to Purchase
If your circumstances change, you have the option to walk away.
**For more information on the new mortgage rules check out the websites listed below:
- Department of Finance, Government of Canada
