“
” Program
Lease
We can hold your dream home for you Until you can own it yourself.
The " " Program is growing in popularity and is a winning strategy for Consumers who have been declined by Traditional Lenders for a Home Purchase or Refinance. Stringent Lending Guidelines being enforced by the Federal Government for Banks and Credit Unions are making it harder and harder for consumers to become homeowners. These same guidelines have also restricted the amount of home equity you can access when you refinance your home mortgage...it is capped at 80%. And...if you have a Damaged Credit rating...or you’ve had trouble maintaining your current mortgage due to hardship…you are basically out of traditional options. So...where do you turn if you have been turned down for a Mortgage because of a damaged Credit Rating? Call a Company that specializes in helping clients who have Damaged Credit and need help to buy a New Home or Save their existing home from Power of Sale! Suffering from Damaged Credit should not prevent you from buying a New Home or Saving the house you have come to call home...We can help! With the help of your Mortgage Professional, a socially conscious Real Estate Investor and a well-structured Lease Purchase Program...you can be APPROVED!!!
Our Success Is Your Success! If you are reviewing a program similar to ours, most likely you are doing some research. Some promoters promise low monthly payments and terms under 24 months. More often than not these programs fail due to lack of proper planning and time invested to correct credit issues related to qualifying with an category “A” Lender.
"
" Program
Where we put Your house on hold for You!
So...Lets Learn what Lease Purchasing is all about...
Let’s begin with the basics... Defining Lease Purchase (Wikipedia) Lease Purchase, also known as rental-purchase, is a type of legally documented transaction under which tangible properties, such as homes, are leased in exchange for a monthly payment and the option to purchase at some point during the agreement. Differing from traditional methods of purchase, Lease-to-own transactions are not obligations to purchase as the agreement can be terminated by the lessee at any point in time with the return of the property. The usage of Lease Purchase transactions began in the UK and Europe, and first appeared in the US during the 1950s and 1960s. While Lease Purchase terminology is most commonly associated with consumer goods transactions, the term is also used in connection with real estate transactions. Lease Purchase agreements are based on a rental term. In the structure of this type of transaction, the consumer (lessee) - at the end of each month - can elect either to renew the lease on a monthly basis by making renewal payments, or to terminate the agreement with no further obligation by returning the tangible property.
How does this general definition of Lease Purchase apply to our program?
" Program
"
, and in simplified terms, when a consumer wants to Purchase a home, the consumer supplies the initial agreed down payment and our Lending Partner purchases the specified home on their behalf. The home is selected by viewing homes with your own Realtor. The Consumer, as the future homeowner, enters into a Lease Purchase contract allowing consumers to pay a monthly lease to occupy the home. Every month, a portion of the Lease Payment (Options Credit) is accumulated in an Options Credit Account and added to the initial down payment. This accumulation will represent the total Down payment when you take ownership from your lending partner at the end of the Lease Term. When a consumer rents a house they normally pay a Security Deposit. In a Lease Purchase Program...this initial Security deposit is added to the total monthly savings (Option Credits) to form the total down payment when you apply for a mortgage at the end. Simple Calculation: A $10,000 Initial Deposit and $300 per month in Option Credits will give you a total down payment of $ 20,800 at the end of a 3 Year Lease Purchase Program. The consumer gets to reside in the home, as their own, with an accepted “Offer to Purchase” in place from day one of the Lease. The “Offer to Purchase” sets the future Purchase Price today, not at the end of the lease term. This way you know you are not going to be negotiating the price if there is a big upswing in property values. The Future Purchase Price is agreed on today! The concept is not dissimilar to entering into an agreement to buy a condominium in a complex that is not quite ready... it allows you to move into the property and buy it at a pre-determined value when the Condominium Corporation is registered and all regulatory work is completed. During the Lease Term, we work with the future Home Owner to address any credit issues which are present today, so, at the end of the Lease term, the consumer can go back to their own mortgage professional, who referred the consumer to our program and they will arrange a traditional mortgage for the new homeowner.
So...why don’t more people use Lease Purchasing? Please read on to find out more...
Lease Purchase Programs in the Canada is a lesser known tool for those needing preparation for home ownership. Over the years many companies marketed their own version of the program. There was no regulatory body and companies were free to do whatever they wanted. Unfortunately, many of these Lease Purchase Programs ended in disaster and a “stigma” has been fairly or unfairly attached to the concept of Lease Purchasing. It is the old saying “One rotten apple spoils the barrel”. Over the years, many of the unscrupulous promoters have been weeded out of the Marketplace. Unfortunately, some remain! At this point, we want to identify these known “Pitfalls”...talk about what they mean and explain how our Program addresses these “Pitfalls”. Our hope when you complete this report is you can identify a well-structured program.
There are 7 Common Pitfalls!
We all have dreams of Home Ownership, but to own a home we can’t really afford will eventually lead to hardship and loss of the home. Things beyond your control, such as a loss of job or a reduction in income can lead to hardship but to start off owning a home you truly cannot afford is not realizing a Dream it is the start of a Nightmare. Living within your means is “very” important to us and we work with affordability ratios very much like what Banks and Credit Unions use to qualify consumers. Staying within financial servicing guidelines is critical to your success...and in turn, our success!
adheres to these guidelines...no exceptions!! Our strong mortgage lending background and key management team allows us to understand what banks want as we keep our finger on the pulse of the Mortgage Industry. Clients entering our Lease Purchase program will do so in a home they can afford and will eventually call their own. We “want” families to succeed. To View the ground rules for CMHC in terms of affordability ratio please see Homebuyer’s Guide to Smart Ownership pg.9-10. Consider moving away from programs where your debt service ratios work out higher than what the industry allows.
When you are “anxious” to own a property for the first time or avoid Power of Sale...Short rental terms, 12 to 24 months, sound awfully attractive. When considering a program...ask yourself... “Are these short terms allowing you the time to establish yourself as the purchaser or repurchase of the future?” Remember...your Bank said NO because you have Damaged Credit. Damaging your credit can be done in a very short period of time...repairing this damaged credit take “a lot” longer than most consumer realize. Re-establishing your credit is a lengthy process which may take years. If you have had poor credit in the past, Banks and Credit Unions want to see those issues be as far in the past as possible. Unfortunately, some Lease Purchase companies promote shorter terms for the sole reason of making their program more attractive.
Ask yourself... How long does it take to re-establish your credit once it has been damaged by life events? Better still...ask an independent Credit Specialist! We do not want you to rely on what we tell you...ask someone who is a professional in Credit Establishment...someone who has nothing to do with the transaction. Ask yourself...what happens if you cannot qualify for a mortgage at the end of your Lease Purchase term? In most if not all cases, you will lose your initial deposit and the Option Credits you accumulated during the Lease Purchase term. Ask yourself ...Do you really want to lose your hard earned money to a poorly structured or predatory Lease Purchase company? will run our Lease Purchase programs for a minimum of 3 to 5 years!! These long terms provide ample time for credit re-building. We work closely with Debt Elimination and Credit Repair specialists who give consumers the best chance at proving you have turned a new leaf in life.
There are so many ads on Kijiji and Craig’s List promoting Lease Purchase and Rent to Own opportunities with as little as zero down or whatever you have in your pocket. Ask yourself: Is this too good to be true? You know the rest! Consider this: CMHC, our government backed mortgage insurer, has, according to Finance Minister Jim Flaherty, hit the $600 billion cap limit set by the Finance Department and will not have the funds to insure every mortgage going forward. This means Banks, Credit Unions and other Lenders will be very selective on mortgages approved in the future. Even today, consumers with “A” rated credit are being asked to come back with larger down payments in order to qualify for a home purchase. Ask yourself: If your credit score has been previously damaged, do you think you have the same chance to qualify as the A, AA or AAA client with the same low down payment? The majority of the families in our program will exit out with 15% equity, thus making them more attractive to lenders. We are familiar with many versions of rent-to-own programs being promoted with very little down payment...we are also very familiar with the statistics showing very few people entering these programs have success at the end. Watch out for inflated Future Purchase Prices!
This simply means the future Purchase Price agreed to will be higher than the actual property value. A trick of many promoters of Rent to Own is advertise cheap payments and charge future Purchase Prices which are not often achievable. The Purchase Price is not achievable as the appreciation rates applied exceed the market average...unless there is a Boom in property values...the agreement will go Boom at the end of the term. Ask yourself: How does a property in an area where the average appreciation is 34% appreciate 6-10% for the next 2-3 years? It doesn’t and this is a one of primary reasons rent-to-own programs have failed in the past...the property value or future Purchase Price are overstated. The program is doomed from the beginning....so...don’t let your emotions allow you to avoid this problem by thinking you can deal with it later... Remember, with our Lease Purchase Program, the future Purchase Price is established today...it starts with an appraisal to determine today’s market value and a very moderate appreciation factor is applied to determine the future Purchase Price. We find out what appreciation factor is applicable. When companies apply higher than market appreciation factors, they do so to make your file more attractive to prospective Real Estate Investors. Unfortunately, the high appreciation factors applied to determine the future Purchase make it impossible to get your own mortgage at the end of the term. No bank, Credit Union or Lender will finance a property with a Purchase Price which is 10% over market value. This is a losing proposition right from the beginning!
We steer away from problematic homes. Homes represented by the owners who want to sell their home privately “as is” or sold as a fixer upper. In most cases these homes are in disrepair and quickly become money pits which could eventually drain you financially. Because it is a private sale, we cannot go back to claim any defects and request some sort of hold back to correct the issues. For this reason alone, all purchases with our Lease Purchase Program are done through a MLS listing. We also request home inspections and home appraisal to confirm the Market value and the condition of the home.
This should be a major area of concern when entering into any contract. We have seen many versions of “rent-to-own” contracts during our time in business and we encourage you to pay special attention when presented a contract to sign. **The success of ANY rent-to-own program hinges on the successful integration of the tenant into Home Ownership...period! ** We strongly encourage you to deal with Companies whose contracts have been reviewed by Real Estate lawyers and are compliant with most Banks and most importantly, are compliant with CMHC. In many rent-to-own contracts, the initial down payment and monthly option credits are non-refundable. This clause is not compliant with the Policies of Banks and other Lenders and many lenders will decline mortgage applications which are non-compliant with Bank and CMHC lending rules. As the consumer, you need to be aware of this. If you see a contract that states nonrefundable, maybe you should be looking elsewhere. This is why, at , it is mandatory you seek independent legal advice (ILA) so you understand the contracts you are signing.
Excerpt from CMHC’s Website: “Rent will only be accepted towards a down payment if it was acknowledged in a contractual agreement that includes the prepayment of equity on a monthly basis as part of an agreement to purchase. This option must involve only the monthly payment of an amount in excess of the market rent for that property. The original agreement should also contain some provision for a full (or partial) refund of that amount in the event that the prospective purchaser did not exercise this right to buy. The total amount of down payment to be credited to the borrower may not be more than the sum of those monthly payments that exceeded the fair market rental for that property.” Make sure you deal with someone who knows the Mortgage Lending Landscape and makes ILA Mandatory.
Cleaning up old credit issues is usually one of the main priorities with any Lease Purchase Program, especially, if this is the reason why a consumer isn’t being approved by a traditional mortgage lender. If these issues are not cleared, history has a way of repeating itself and consumers would be found in the exact same position at the end of the rent-to-own program as they are today. This may lead to a default in many rent-to-own programs and will leave consumers disappointed when they are not able to purchase the home they have been leasing for the last few years! We see this happening in many competitor rent-to-own programs. Tenants are more frequently turning to us for guidance on what to do next. Depending on how their current rent-to-own deal is structured with our competitor, sometimes we are able take over the deal and try to make it right...other times the family is about to lose everything...their initial deposit and accumulated Option Credits! In the Your Team "HomeHolders" Program, the investor pays for a credit mentorship on behalf of the client to ensure that the client will be credit worthy at the time of purchase. Your Team "HomeHolders" Program and its affiliates will prepare a monthly budget and can work with you to make sure consumers stay on track with their Lease Purchase Program and can exit at the end of the term.
Over the years, we have seen many competitors come and go. Most go out of business because their Lease Purchase program was never properly structured. After a a few screaming clients, they too realize their program has just put families in jeopardy and the path of least resistance is to close their doors! Most rent to own companies don’t last more than a few years! Your Team "HomeHolders" Mentor lends more than 25 years’ experience. Your Team "HomeHolders Program has adjusted for Your Success
Your Team "HomeHolders” Program is held in high regard with the Mortgage Industry!
Industry stats say more than 75% of other rent to own programs end in default… Don’t let this be your future?
Find the Right Company! Lease Purchasing should be a win-win strategy for everyone. Owning and keeping a home is the largest and most desired transaction for any family!
When the process has begun, we feel it’s important that, as our client, you step through this process with your eyes wide open as we develop a transparent relationship. You will know all your specific obligations in advance to us moving forward.
1. Activation Fee: A Non-refundable fee of $565 is required by our Affiliate Company in order to begin processing your application. 2. A Home Inspection and Home Appraisal are both mandatory by law. These costs are to be factored into the budget of the Future Buyer, approximately $400 to 500 plus tax each. 3. Content Insurance will have specific Liability and Content requirements and must be maintained for the duration of the contract. 4. Credit Management is mandatory for the full term of the contract and costs will be shared 50/50 with the Future Seller and Future Owners approximately $700 per year 5. Debt Settlement: If Debt Settlement is required, our Affiliate Company will work with your creditors to negotiate settlements. Our 3rd Party Provider charges a Fee of 35% + HST on the money you save. 6. Time to Close: Closing requires approximately 4 weeks after a firm Commitment from the Seller is in place. 7. The Monthly Rental Top up is generally 20% and is added as savings to your initial down payment. 8. Down Payment: A down payment of no less than 5% is required. 9. Monthly Payments: Include Mortgage Payments, Property Insurance & Property Taxes 10. Program Costs: The Investor will earn approximately 3% per year on the value of the home. 11. Acceptance Fee: There is a charge of up to 2%, to be determined and disclosed in advance of you entering the program. It is payable in advance and is usually based on perceived risk. It is also used to help cover the cost and to begin the process of putting all the professionals in place to acquire your new home. 12. Exit Strategy: This is a critical part of our program and we strive to create success for both the future Buyer and Investor. Our mission is to assist Canadians with opportunity to Own their Own Home. This program is set up and designed for this purpose. Please take your time and evaluate the responsibilities and obligations here in, before you enter into the program.
Join us every Sat Morning from 11:00am to Noon on Your Home Your Money at www.RealityRadio101.com
At
YT
our
eam
Y
we put
ou first!
“
” Program
Helping you own a home is our privilege.
YT
our
eam
Randy & Jackie
Rodney
Mortgage & Real Estate Broker M0800966 Cell: 647-703-6099 eMail: Randy@YourTeam.Pro