Thanks to both Madison and Dan Heon for this valuable information. Although, I wonder if I can get a bit more clarification:
1. I assume that these rules apply only to mortgages that must be insured by CMHC, i.e. those where the down payment is less than 20% on the rental property, and I pay for the CMHC insurance, or where the mortgage is arranged through a trust company (rather than a major bank) in which case the trust company pays for the CMHC insurance. Would I be correct ?
2. Item # 4 : Why must a portion of the funds (20% - 25%) be refundable if deal does not proceed ? - not that I wouldn`t refund some portion ... I`m just asking.
3. Item # 5 : Which "additional lump sum payments " are meant ?
4. Last paragraph : Why do lenders need to know that the rental property is a "Rent-To-Own". What difference is that to them from a normal rental ? Seems to me that from a lender`s point of view the Rent-To-Own has less financial risk than a typical rental. The monthly payments are higher (even though the option portion of the rent will eventually be given back to the tenant if and when they close on the preperty) thus providing a higher (albeit temporary ) net cash flow for the duration of the lease agreement. This leads me to the next question: Which rental amount should be reported to the lender ? Just the base amount, or the base + the option amount ?
Thanks in advance to anyone who can shed a bit more light on the above.
