Thursday, April 25, 2013

Phantom Mortgages explained

Toronto Skyline 2020
When you purchase a NEW condo you have 10 days to "escape the contract"  Period of Rescission.

They are only holding your $ 2,000 deposit
If you continue your staged deposits over the next 30 - 60  - 90    OR 30 - 90 - 180 days is;

5% of the Purchase Price (less the $2,000 deposit)

5% at agreed date by post dated cheque

Next 5% at agreed date by post dated cheque.

You effectively have a 15% down payment into your condo purchase at they will build it.

When you have been notified of your OCCUPANCY DATE   you will now commence to pay estimated maintenance,  ( Toronto average is $ 0.58 per square foot ) Estimated Property Taxes and Phantom Rent.

Your Phantom RENT is calculated as Purchase Price less your down payment then at the rate of interest contained in your contract. (payable monthly)

If you wish to pay cash; you must advise your builder at the PURCHASE POINT in Time or it does not count.

Lets try a sample calculation

Purchase Price                  $ 400,000
Downpayment   15%               60,000
Net Outstanding                 $ 340,000

Taken at a simple interest rate of 3% would be rent of (340k X 3 %)  divided by 365 Times 30 days would be $ 838.35 per month.

Your Tenant may move in at the Occupancy Date

It may take the condo  6 months to a year to collect all the paper work for Registration.

At Registration and Hand Over ( meeting ) you have already closed and are given control (elect your) Board of Directors.

Do you have a specific question you would like answered?

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