What is our Rent-To-Own Program?
Many individuals aspire to own a home but face various challenges that can make this goal seem unattainable. Our Rent-to-Own program aims to facilitate homeownership for those who may not meet traditional financing criteria. This program is particularly beneficial for:
- Individuals lacking the typical 20% down payment required by banks.
- Newcomers to Canada without established credit histories.
- Residents with no credit history despite living in Canada.
- Those with poor credit who can demonstrate a reliable income and a commitment to improving their financial situation.
For further information, feel free to reach out at 416-450-0747 or complete the form below, and I will get back to you to discuss your specific needs.
How the Program Works
The Rent-to-Own process involves several steps:
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Qualification Criteria
Our program has more flexible requirements compared to traditional banks. To qualify, you need:
- An initial deposit of at least $10,000, which will count as your equity in the home.
- The following documents
- T4 or Notice of Assessment from the previous year.
- Two recent pay stubs.
- An employment letter detailing your wages, job function, and start date.
- A credit report from Equifax or TransUnion.
- Proof of discharge if you have previously declared bankruptcy.
Sample Scenario:
Consider the following hypothetical situation:
- Annual Income: $30,000
- Initial Deposit: $10,000
- Home Price: $200,000
In this case, the investor would purchase the home, and you would enter into a Rent-to-Own agreement.
Financial Breakdown:
- Initial Deposit: $10,000 (applied towards the home purchase at the end of the contract)
- Monthly Rent: $1,300 (market rent is approximately $1,100; the investor charges a premium of $150 to $200)
- Monthly Equity Contribution: $400 (applied towards building equity)
- Total Monthly Payment: $1,700
You will be responsible for utilities, while the investor covers maintenance and property taxes.
Buy-Out Options
You have the opportunity to buy the home at the end of each contract year:
- End of Year 1: Purchase price $212,000; total down payment credit $14,800; mortgage required $197,200.
- End of Year 2: Purchase price $222,600; total down payment credit $19,600; mortgage required $203,00
- End of Year 3: Purchase price $233,730; total down payment credit $24,400; mortgage required $209,330.
A mortgage broker will assist you in preparing for the home purchase at the end of your term.
Advantages of the Program
- Immediate occupancy in a home of your choice.
- Opportunity to improve your credit and qualify for traditional mortgages.
- Fixed purchase price that remains unchanged.
- Consistent monthly payments throughout the contract.
- Simple qualification process with a $10,000 deposit and manageable monthly rent.
- Equity accumulation with each payment.
- Potential benefits from market value increases.
- Investor covers land transfer taxes and property taxes.
Considerations
- Ensure you can consistently make monthly payments to avoid the risk of eviction.
- If you decide not to buy, any accumulated equity will be forfeited.
- This approach is most beneficial if you intend to purchase the home; otherwise, it may result in higher costs due to fees and above-market rent.
Are you ready to take the step towards homeownership within three years? Contact me for more information, fill out the form below, or call 416-450-0747 to get started.