Buying a Home with Your Friend to Save Money
The housing market in the Greater Toronto Area is one of the most expensive in Canada, putting purchasing a home out of the reach of many potential buyers. If you’re looking to buy a new home in Canada, you can always opt for a fixer-upper, but unless you have previous do-it-yourself experience, this may not be an option. That’s why you may want to consider going in with a family member or friends to buy a home.
The cost for even detached homes is often out of the range of first-time homebuyers; they may also not be able to afford a down payment or ever qualify for a mortgage. To counter this, many couples and newcomers to Canada are buying homes with friends or family, something that can end up costing considerably less.
Aside from saving money, co-purchasing a home with family or friends has many advantages, explained below.
Apartment/Condo Living Without Rent/Fees
Many estate homes come equipped with kitchens and bathrooms on different levels so your family and friends can live separately. With some creativity, a spare bedroom can be turned into a living room, and unlike living in an apartment, you’ll have a yard to socialize and play in.
If you buy a home with friends or family, you can opt for a mixer mortgage, which can be split into separate terms (fixed and variable), different amortizations, and more. If you’re buying a new home in Canada yourself or you’re looking into purchasing your first home with others, remember to treat it as a business transaction and don’t let emotions get in the way.
How to Divide Up the Payments
Whether you’re looking to buy an estate home or a detached home, you should decide who is going to pay for the purchase and who is going to cover maintenance, or if these costs will be divided. Another way to cover payments is to rent out the other floors in the home (or rooms, if it’s a luxury condominium). It’s also recommended that you sit down and negotiate what you will do, should one of you one day decide to move.
Talk to a Lawyer
Even if you’re buying a home or condo with family or friends, it is recommended that you consult with a lawyer about legal documents. If you’re looking to buy a new home in Canada, Bremont offers estate homes, detached homes and luxury condominiums in unique communities throughout Southern Ontario at an affordable price. Whether you’re looking to buy on your own or with family or friends, Bremont has a home or condo that will fit your budget.
Leong, M., “How to co-buy a home with your friend in Canada’s expensive market,” Financial Post, November 22, 2014; http://business.financialpost.com/2014/11/22/how-to-co-buy-a-home-with-your-friend-in-canadas-expensive-market/.