Rent To Own Process
How It Works
Our program is much less strict than a bank, but we do have some qualifications. You’ll need a down payment for the home you want to buy. This can range from 5% for one of our listings (see Home Listings) to 10-20% for an MLS listing, plus other costs such as Property Transfer Tax, legal fees, inspection and appraisal fees (but the good news is there’s no CMHC insurance fee, which can save you a lot of money). If you are buying an apartment, condominium or townhouse, you will be responsible for strata fees, property taxes and insurance. If you believe you qualify…
Identify the area you want to live in and check out listings in your price range at realtor.ca or rew.ca. Call us with the MLS listing, we will assess the property and make an appointment with you to discuss your situation.
If it looks like we can make it work for you, you’ll pay $1500 to cover Legal fees and to reserve the requested mortgage fund for you. If the Appraisal and Inspection go well, you’ll give us the down payment, we will purchase the property and acquire a mortgage on your behalf. You sign a 3-5 year Residential Lease agreement and an Option to Purchase. We hold the title to the property until the end of the term. No rent increases until you’re ready to buy!
You are considered to be the owner when you move in, with all the rights and responsibilities of ownership. This means you can personalize your space; paint the walls, change fixtures etc. It also means abiding by any Bylaws and paying the strata fees (if applicable), property taxes and insurance. A portion of your rent pays down the mortgage. The 3-5 year term allows you time to take care of the reasons the bank would not give you a mortgage, such as a poor credit rating, lack of work history, obtaining Permanent Residency status etc. This is one of the advantages of the RTO Homes program – you get to live in a house to call your own, and address your financial issues at the same time.
At the end of the term, you exercise the Option to Purchase and the title is transferred to you – if you want it. Your purchase price is locked in from the start of the term, so your original down payment and the principal portion paid down by your monthly payments have reduced the amount owing for the home. On top of that, the property has likely increased in value, and you get to keep that as well! So now you have substantial equity built up in a home, plus a record of making regular payments which will improve your credit rating and make transitioning to your own mortgage possible. Your other option is to walk away – you are under no commitment to purchase the home at the end of the term. You are in complete control!