The Nuts and Bolts
Here is how it works
Complete FirstStep’s simple pre-approval process (coming soon).
Now approved, with your realtor’s help you get an accepted offer on your chosen home, do your inspections and due diligence, remove subjects, get your 10% down payment ready and start packing, same as a normal transaction. FirstStep contributes up to 70% of the purchase price for you and the 20% balance is made up of a small, flexible home-owner loan which we help you arrange with your bank, credit union or one of our partner institutions. At closing, funds go to the seller, title is transferred and you move in to your new home. Simple.
Our Unique Twist: In a traditional transaction using a mortgage the title goes into your name but the bank puts a mortgage charge on it. You have title, but the bank is in control until you pay them out. With FirstStep, it’s the same but in reverse, we hold title but you put a charge on it called an Agreement for Sale (AFS). Just like a mortgage however, once you pay us out the title transfers back to you and the AFS is removed. With FirstStep you are in control.
At the end of the AFS you pay FirstStep our investment back plus a reasonable, pre-agreed premium.
“Apply Now” and secure your place with hundreds of buyers like you for FirstStep’s unique program.
You are in 100% control
It’s your home, you live in it, renovate it, pay the taxes and water the flowers, we simply hold the title to the property for you on terms that we all set and agree in advance. In reality it’s not dissimilar to traditional financing but fairer, with fewer hoops to jump through and a lower monthly cheque to write. All possible by simply switching who holds title.
The FirstStep Agreement For Sale
The standard term for our AFS is 10 years. History proves irrevocably that if you bought a home on any day over the last 40 years and held for 10 years, it never went down in value. In fact the lowest gain was around 30% and the highest gain over a 10 year period was over 200%.
Our Agreement for Sale is flexible – it’s pre-payable, adjustable, transferable and extendable.
At any time during the term, you may pay out the Agreement for Sale plus the pre-agreed, fixed 3.0% redemption fee. Typically the funds to pay the agreement out would come from traditional mortgage refinancing or sale of the property allowing you to leveraging the savings and equity built up.
Now you own title 100 percent.
Here’s how you save
Unlike financing from a traditional bank, FirstStep does not charge principle and interest on our portion. We charge interest-only, likely at a lower rate than your bank will offer you, just like the bank of Mom & Dad would.
This small monthly difference means big annual savings. On a $1 million home you could save as much as $10,000 each year. That money goes into your RRSP or similar savings plan, building a sound long-term financial plan.
At the end of the 10 year term (or sooner if you are ready), you have three options:
- You arrange a conventional mortgage re-financing and use those funds to pay out FirstStep and you become the sole owner of the title; or
- If the timing is not right for you, you can extend your Agreement for Sale*; or
- You can sell the property, pay out FirstStep and benefit from any increase in equity.
The Agreement for Sale, like a traditional mortgage, is portable to another property if you move, assumable by another qualified person if you sell, or can be paid out at anytime*
*subject to pre-agreed terms and conditions