Frequently Asked QuestionS
Frequently Asked Questions (FAQ)
How does the Rent To Own System Work?
Read all about our system here.
Is the property mine with Rent to Own?
When the lease term ends, you exercise your Option to Purchase and the title will be transferred to you when you secure a traditional bank mortgage for the property.
Why is the interest rate higher than the banks?
There are a couple of reasons for this. We are a Commercial business and therefore not eligible for the lower interest rates you see banks offering to individuals. Also, we utilize investor money to supplement your down payment in order to purchase the property. Investors require a return on their capital, so the difference between the interest rate we acquire for your home and the interest rate we charge you goes to the investors as their return.
Do I have to pay for the maintenance fee?
Yes, that would be part of the agreement. You will have every right and obligation as if the house is fully owned by you. As with a mortgage from a bank, you would be responsible for these expenses.
How much down payment do I need to pay initially?
The initial down payment varies depending on the situation. The higher the down payment, the lower the mortgage rate is going to be.
What is the mortgage rate going to be?
The mortgage rate varies depending on a number of factors such as down payment amount, location of the home, length of the term etc. Incidentally, this is one of the reasons we hold the homes title for the length of the term. We want to be able to secure the most competitive mortgage rate for you, so we purchase the property on your behalf. This way, we are able to obtain an excellent mortgage rate due to our high credit ranking with major financial institutions. As a result, we will be able to offer you a highly competitive mortgage rate.
We offer much lower mortgage rates than other lenders in the secondary mortgage industry. The maximum mortgage rate is the CIBC 5 year fixed posted rate + 2 percent.
What if I am not able to secure financing in 3/5 years?
If, despite your best efforts at becoming “bank-worthy” by the end of the term, traditional financing is still denied to you, there are a number of options available:
- First, you can simply extend your term with us and continue on with the program until such time as you become eligible. The interest rate on your deal would have to be adjusted to reflect the prevailing rates at that time.
- Second, you can instruct us to sell the property. As long as the sale price is sufficient to cover the outstanding balance on the mortgage, we will comply. If the market has gone up during the term, you may actually realize a profit on your sale.
- Third, you can rent the property out as long as doing so doesn’t conflict with any Strata bylaws.
How can I ensure I will qualify for bank financing at the end of the Term?
The important question is what makes you think you would not be able to secure a bank loan in 3/5 years.
- Obtaining Permanent Residency (PR) status in time
Solution: Work with an accredited Immigration specialist to guide you.
- Damaged credit history
Solution: We will assist you with credit counseling to help you improve your credit.
What happens if I must move somewhere else or experience a change in circumstances and am not able to continue to support the monthly installments?
Our ideal goal is to transition you to home-ownership. However, if you could not continue to support the monthly payments, there are options to consider;
• Instruct us to list the property for sale. As long as the sale price is sufficient to cover the outstanding balance of the mortgage, we will comply.
• Rent the property out (as long as doing so does not conflict with any Strata bylaw) and move somewhere within your financial capabilities. As long as the rent covered the mortgage, strata fees and property taxes, this is an appealing solution as you would retain the property.
• Find an interested individual who is willing to take over your lease.
Do I have to purchase one of the listed properties?
No. Our Rent to Own Program is applicable to any property in the Lower Mainland. Please note that only 5% down-payment is required if the property is one of our own listings, 10-20% downpayment is needed otherwise.
Can I use this program for a trailer or raw land?
This would be very dependent on the situation, especially the location. Mortgages are very difficult to obtain for these types of properties. We would need a minimum of 50% down payment to consider this type of agreement.
Do I pay Property Transfer Tax at the beginning of the term when the home is initially purchased and again when I buy it from you at the end of the term?
Yes. It is considered a second sale of the property and is subject to the Property Transfer Tax, paid by the purchaser.