|Selection of your home
||Mostly limited to a smaller number of homes, usually older and in questionable condition.
||Mostly focused on brand new homes built by developers (e.g. condos, townhouses and single family detached).
|Bank qualifying required
|Down payment required
||Yes – varying amounts.
||Yes – your choice (1%-5%).
||Usually three years or less.
||Seven years with an early buy out option benefiting the HomePlan purchaser.
|“Protected” purchase price
||Can be negotiated but there is no set industry standard.
The purchaser shares in the mortgage pay down and the appreciation of the home up to the historical annual appreciation rate for that city and receives 100% of any appreciation above that. All of the purchaser’s share of the increase and pay down goes to the purchaser’s benefit when completing the purchase.
||Informal option contract but rarely registered as a charge on title.
||Formal right contract plus re-sale right providing realization of equity on sale even if the right is not exercised. Secured by way of a registered charge on title.
|Protection of equity
||Usually built-up equity credit is forfeited if the option-to-purchase is not exercised.
||Equity is protected and rights are granted and secured by a registered charge on the title of the property. The property must be sold if the HomePlan funder is not going to buy back the right-to-purchase.
||No. All equity growth goes to the landlord not the renter.
||Yes. A participation in the appreciation of the property value and participation in the pay down of the mortgage.
|Home costs (repairs, maintenance, taxes, etc.)
||Yes, renter responsibility.
||Yes, HomePlan tenant responsibility.
||Not allowed. Equity build-up is at risk of being forfeited.
||Not allowed. Equity build-up is not automatically at risk, mitigating options are available to limit any equity build-up loss.
|Plan completion and support
||The landlord has little incentive to see the completion of the plan. In fact, the landlord benefits more by having the renter fail, as they get to keep the deposit and find another rent-to-own tenant or sell the home.
||HomePlan tenants receive ongoing support and encouragement to complete the plan. This includes, credit improvement advice and assistance in qualifying for a mortgage. As well, HomePlan purchasers have access to the HomeIndex Mortgage, which provides a better opportunity to obtain the best financing available.
|Future mortgage options
||None within the plan.
||Yes – the HomeIndex Mortgage.
||Yes, the built-up credit can be transferred to someone else or sold for a profit before the option date expires.