Frequently Asked Questions
Frequently Asked Questions
Read all about our system here.
No. During the term, we retain the title. However the contract ensures you have exclusive rights to the property for the duration of the term. At the end of the term, you obtain a bank mortgage, exercise the Option to Purchase and the title is transferred to you.
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.
Yes, that would be part of the agreement. You will have the same rights as well as the same obligations as any homeowner. As with a mortgage from a bank, you would be responsible for these expenses.
At this time, a minimum of 10% is required. Every 5% increase over and above that would trigger an interest rate reduction. For example, our current interest rate is 6.29% based on a 10% down payment. The interest rate for 15% down would be 5.79%. These rates are subject to change.
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 are able to offer lower mortgage rates than other lenders in the secondary financing industry. The maximum mortgage rate is the CIBC 5 year fixed posted rate + 2 percent. Our current rate based on a 10% downpayment is 6.29%. This rate is subject to change.
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 sell the property. As long as the sale price is sufficient to cover the outstanding balance on the mortgage and any early discharge penalty we may incur from our mortgage provider, we will allow it. 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.
This would depend on you addressing the reasons a bank wouldn't finance you today. If you have poor credit, we would suggest working with a Credit Counsellor to improve your rating. If you don't have PR status, work with an accredited Immigration Consultant to guide you. If you are self employed and aren't showing sufficient income due to reporting methods, work with an Accountant to address that situation. We would also suggest keeping abreast of any qualification changes banks may institute in the interim. Working with a Mortgage Broker during the term who is informed of your situation would most likely prove valuable as well.
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:
- List the property for sale. As long as the sale price is sufficient to cover the outstanding balance of the mortgage and any early disharge penalty we may incur from our mortgage provider, we will allow it.
- 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.
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.
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.
Yes. It is considered a second sale of the property and is subject to the Property Transfer Tax, paid by the purchaser.