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In today's increasingly competitive housing market, more and more people are considering home co-ownership. Many people buy homes together – couples, siblings, parents and children, extended family, and even friends.
Sharing a mortgage can make homeownership more accessible, but it's important to discuss all the details before deciding to co-own.
What you need to know about joint ownership
All co-owners are 100% responsible for the mortgage, even if you each hold different total equity shares. So, you need to consider what will happen if someone wants to sell or cannot make the mortgage payment.
Creating a formal agreement is an excellent way to avoid future conflicts – like what happens when one person wants to sell or move out. It can also address the division of household expenses, like taxes, utilities, home maintenance, and renovations. We recommend borrowers seek legal advice to help you lay the framework for the rules surrounding your joint mortgage.
What about insurance?
A mortgage is a considerable investment and one that all co-owners want to protect. If you or one of the other borrowers were to die before the mortgage is paid off, the rest of the owners would become responsible for the entire mortgage. A life insurance policy for each joint owner that would cover their share of the loan is an effective way to protect your home.
Don't forget about government programs for homebuyers!
The Canadian government offers several programs and incentives for first-time homebuyers, even if your co-buyers have owned a home before!
Living in harmony
Living arrangements work best when everyone is up-front about their expectations and lifestyle. If someone likes to entertain and stay up late, and someone else wants a quiet refuge, that may create conflict. Having conversations about lifestyle and house rules before entering into a joint mortgage can ensure a positive homeownership experience for everyone.
Book an appointment to talk to an mobile mortgage advisor about co-ownership today!