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If Your Answer is YES to the Questions Here, RTO is Your Best Alternative to Homeownership

  1. Do you need Time to Save for down payment?
  2. Are you a newcomer to the country?
  3. Do you need time to solve credit issues in satisfying your needs in real estates?
  4. Are you self-employed?
  5. Are you encountering mortgage payment challenges?
  6. Is the mortgage stress test stopping you?
  7. Do you need to move in to Your Home NOW?

Our Rent-to-Own Programs

RTO with Monthly Savings Plan (Recommended)

  • Down payment – 5% or $10,000 towards the purchase of the property
  • Tenor – 3 -5 Years
  • Monthly rent includes savings towards the down payments (by the end of 3-5years, Down payment already available for Mortgage finance)
  • Credit repair and mentoring services available
  • Debt settlement services available
  • Best established RTO in North America

RTO with Initial Monthly Option Plan (Suitable for those with Good Credit)

  • No Down payment is required
  • Tenant-Buyers to save for down payment during the tenancy period
  • Payment of initial option (right to purchase) is compulsory
  • Credit repair and mentoring services not available
  • Debt settlement services not available
  • Usually for a short term (2-3 years)
  • Future property price is agreed today

For further information, complete the contact form and one of our RTO Specialists will contact you within the next 2 business days.

KNOW YOUR OPTIONS WHEN TRADITIONAL LENDING DOESN’T WORK

PRIVATE LENDING VERSUS RENT TO OWN

Rent-To-Own Program is still adjudged the better option to private lending when traditional lending does not work.

The sample worksheet below demonstrate how RTO works when compared to Private lending:

Property Tax:
$2,500.00
Example House
$400,000.00
Traditional B Lending
Private Lending
Rent To Own
Terms:
1 year
1 year
3 – 5 year
15% down
10% down
5% down
GDS/TDS = 40/50
GDS/TDS = N/A
GDS/TDS = Yes
Assumed Monthly Expenses:
Required Downpayment
$60,000.00
$40,000.00
$20,000.00
Home Insurace
$100.00
First Mortgage
$300,000.00
$300,000.00
Condo Fees
$350.00
Second Mortgage
$40,000.00
$60,000.00
Property Tax
$208.33
Lender/Document fees
$4,000.00
$8,000.00
$565.00
Utilities
$250.00
Appraisal
$395.50
$395.50
$395.50
Total Monthly Expenses:
$908.33
Inspec on
$508.50
$508.50
$508.50
Lender Legal Fees
$-
$1,200.00
$1,200.00
Borrower Closing cost
$6,000.00
$6,000.00
$6,000.00
Broker Fees
$1,700.00
$3,400.00
$ 4,000.00
$1%*
Total Cost of Borrowing:
$72,604.00
$59,504.00
$32,669.00
First Interest Rate:
3.75%
7.99%
0.70%
Monthly Payments
$1,889.00
$2,397.00
$2,660.00
2nd Interest Rate:
3.75%
12.99%
N/A
Monthly Payments
$125.00
$649.50
$-
Monthly Payment:
$2,014.00
$3,046.50
$2,660.00
BORROWER MONTHLY PAYMENTS: (Incl. Assumed Monthly Expenses)
$2,922.33
$3,954.83
$3,568.33
PROS
CONS
PRIVATE
•  Title under Borrower
•  High Interest Rates
MORTGAGE
•  Home Ownership right away
•  High Cost Of Borrowing
•  No GDS/TDS Requirement
•2 High interest mortgages
•High Risk of Default
•No Insurance op ons provided
RENT TO OWN
•  Apprecia on capped at 3% per year
•  Title under Investor/Company
•  Equity Increased at  time of borrower take over of  title.
•  GDS/TDS requirement within reason – must make sense.
•  Low Down Payment Requirements
•  Debt Consolida on Programs
•  Credit Mentoring Programs
•  Low Cost To Borrow
•  Low Risk of Default
•  Job Loss Insurance
•  Life and Disability Insurance
*Broker Fee may be higher depending on the complexity of the RTO.

For further information, send email to: support@rtohomeweb.com

 

Publication Courtesy: Liz Young, Search Realty and RTO Home Web

Will province’s new down payment loan program turn more renters into home buyers?

You’re going to have to be flexible,’ cautions P.E.I. Real Estate Association

The Island’s real estate industry is reacting with both excitement and skepticism to the provincial government’s plan to help more Islanders get out of renting, and buy their own homes.

As part of its new housing action plan, the government says in September it will start offering interest-free loans to Islanders to cover up to five per cent of the home’s purchase price, to be used as a down payment.

 

Greg Lipton, president of the P.E.I. Real Estate Association, says he sees the rationale for the program.

“At least once a week, I’m talking to someone that says, ‘yeah if I had the [required] down payment, I’d buy that house,'” he said.

Greg Lipton, president of the P.E.I. Real Estate Association, says he hears from Islanders every week who can afford to pay a mortgage, but haven’t saved enough for a down payment on a house. (Steve Bruce/CBC)

‘They’re going to have to look outside the city limits’

But even with that down payment on loan from the government, Lipton questions just how easy it will be for renters to enter the real estate market.

For one, he points to the high demand and low supply of homes in the Charlottetown area, which has pushed home prices up, beyond what he suspects many of today’s renters in the city will be able to afford.

“That’s why they’re going to have to be flexible,” said Lipton. “That’s why they’re going to have to look outside the city limits.”

Even if it’s an interest free loan, you’re still going to have to be able to afford to pay that, plus whatever your mortgage is going to be.– Greg Lipton, President, P.E.I. Real Estate Association 

Even then, Lipton questions whether lenders and insurers will be as likely to approve mortgages, when the minimum five per cent down payment is coming from a government loan.

“That really is the big question,” he said. “The lenders like to have anyone borrowing money to have some skin in the game, to show they can pay the bills right? Even if it’s an interest-free loan, you’re still going to have to be able to afford to pay that, plus whatever your mortgage is going to be.”

Heath MacDonald, P.E.I.’s finance minister, says the province will only issue loans to applicants who have been pre-approved for a mortgage. (Steve Bruce/CBC)

No obstacles, says finance minister

The province says it will only issue loans to applicants who have been pre-approved for a mortgage.

Finance Minister Heath MacDonald says he’s not concerned the government loan will affect Islanders’ ability to get that pre-approval.

I don’t foresee there being any obstacles from them lending money to individuals just accessing a down payment.– Heath MacDonald, P.E.I. finance minister 

“There’s lots of competition between the financial institutions and mortgage holders,” said MacDonald. “They want the business, and if we have people that meet their criteria, I don’t foresee there being any obstacles from them lending money to individuals just accessing a down payment.”

The Canada Mortgage and Housing Corporation (CMHC), which insures mortgages for lenders and sets minimum down payment rules, said it does consider the source of those down payments before approving a mortgage.

“These standards include testing a borrower’s ability to repay not only their mortgage but also their other debts, including the repayable loan, as well as a premium surcharge anytime a borrower is not providing the full minimum down payment from their own resources,” CMHC said in an email.

The province says it’s still working out many of the program’s specifics, including income thresholds, loan limits, and how long people will have to pay back the loan.

 

Culled from CBC News

CMHC moves to make it easier for self-employed to get a mortgage

People who work for themselves often hampered in mortgage market because income is variable, unpredictable

Changes unveiled last week by the federal mortgage insurance agency are aimed at giving lenders more guidance and flexibility when it comes to self-employed borrowers.

In the changes, CMHC said several factors could be used in future to support a lender’s decision to give a mortgage to self-employed borrowers who have been operating their business for less than two years or have been in the same line of work for less than two years.

CMHC said those factors could include things such as:

  • Acquisition of an established business.
  • Sufficient cash reserves.
  • Predictable earnings.
  • Previous training and education.

CMHC said that previously, those types of applications could be accepted, providing that a “solid rationale” was noted in the lender’s loan file.

Document options

Additionally, the housing agency also laid out a broader range of document options that could be used to satisfy income and employment requirements to qualify self-employed borrowers for a loan.

When the changes take effect on Oct. 1, those documents will include such things as a notice of assessment accompanied by a T1 General tax form, a proof of income statement from the Canada Revenue Agency, and a form T2125, which is a statement of business or professional activities.

“These policy changes respond to that reality by making it easier for self-employed borrowers to obtain CMHC mortgage loan insurance and benefit from competitive interest rates,” said Romy Bowers, the agency’s chief commercial officer, in a statement.

Borrowers who have a down payment of less than 20 per cent of the value of the property they’re buying are required to obtain mortgage insurance.

Cynthia Holmes, chair of the real estate management department at Ryerson University’s Ted Rogers School of Management, said the main challenge facing self-employed potential mortgage borrowers today is income documentation, adding that the changes announced seem to increase the flexibility in what lenders can accept.

Young self-employed people

Holmes said she is particularly pleased that CMHC is signalling that they will be more flexible when it comes to potential self-employed mortgage borrowers who have been operating their businesses for less than two years.

“This change could especially help young self-employed people access a mortgage more quickly, which supports innovation and entrepreneurship,” she said.

Mortgage comparison website RateSpy.com said the new changes from CMHC will apply to self-employed borrowers who:

  • Have a down payment of less than 20 per cent and require high-ratio default insurance.
  • Have a down payment of more than 20 per cent and are using a lender that insured all of its mortgages.
  • Are switching to a lender that insured all of its mortgages.

RateSpy.com also pointed out that other mortgage default insurers, including Genworth Canada and Canada Guaranty, have programs for self-employed borrowers.

“These insurers have long allowed more liberal proof of income,” such as more flexible documentation requirements, RateSpy said in an online post.

“But, unlike CMHC, Genworth and Canada Guaranty require the borrower to have been in business for at least two years, in order to benefit from this flexibility.”

 

Culled from CBC News

There is Always Something for You!

Do you want to be a Homeowner? There is always something for you!!!

There is always something for you in Rent-To-Own Program either you have no down payment or not so good  credit.

RTO is one of the most established and flexible homeownership program that has something for everyone. The program comes in different shapes and sizes, thereby allowing a bigger room for flexibility when compared to conventional way of owning a home.

Summary of the two available plans are described below:

RTO with Monthly Savings Plan

  • Down payment – 5% or $10,000 towards the purchase of the property
  • Tenor – 3 -5 Years
  • Monthly rent includes savings towards the down payments (by the end of 3-5years, Down payment already available for Mortgage finance)
  • Credit repair and mentoring services available
  • Debt settlement services available
  • No initial or monthly option
  • Best established RTO in North America

RTO with Initial Monthly Option Plan

  • No Down payment is required
  • Tenant-Buyers to save for down payment during the tenancy period
  • Payment of initial option (right to purchase) is compulsory
  • Suitable for those with good credit but no down payment
  • Credit repair and mentoring services not available
  • Debt settlement services not available
  • Usually for a short term (2-3 years)
  • Future property price is agreed today

For more information, send email to support@rtohomeweb.com