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Reducing the Financial Burden

Partnering makes it easier to pass the means test because the combined salaries of the partners are taken into account. It may even be possible for two people to make a larger down payment improving your chances of getting bond approval.

Partnering with someone may also mean that rather than having to purchase an entry level home the partners can buy up, given that the allowable repayments will be calculated on the combined incomes of the partners. All in all, buying with a partner reduces the individual financial burden since shared maintenance and utilities costs should further reduce the financial implications of buying a new home.

Choose Your Mortgage Partner Well

Mortgage partners come from across the board and can include parents, siblings, colleagues or friends. The only hard and fast rule in choosing a partner is that you should trust your partner implicitly since you’ll both be responsible for maintaining on time mortgage payments. Because both owners are responsible for the bond repayments any potential problem with cash flow must be honestly and timeously discussed so that both partners have an opportunity to resolve the situation.

In applying for a mortgage both partners credit scores will be taken into account and if one of the partners has a poor credit score it can increase the required interest rate. Even a small increase on a large long-term bond can have a major impact on the eventual price.

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A Written Agreement is Essential

Buying property is a long-term investment, which means that there is a reasonable chance that circumstances will change during the term of the mortgage. Before drawing up the agreement you and your prospective partner should have a frank discussion about what you hope to get out of the investment, how long you plan to live together and what will happen when one of the you want to sell your share. You should also discuss who is responsible for the various aspects of home maintenance.

Before you embark on such a partnership it is essential that you employ a lawyer to draft an agreement. If one of the partners to the agreement reneges it could leave the other partner with a compromised credit score. You should also ensure that an exit arrangement is in place since it is likely that one of the partners will exit the agreement at some stage. If you both want to sell, it will be simple but when one partner wants out things can get difficult.

Finding a Partner

If you don’t know anyone that would be in a position to share a mortgage with you, real estate matching services have sprung to the need and will help to match you with someone who is looking for a partner. There are also lenders that specialise in products that are designed for partner mortgages. As many as four people can partner on a mortgage.

Buying a house with a partner could make it possible for you to purchase your own home, but the partnership must be approached with caution and the agreement between you should cover all potential problems.

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Afton Jaskolski
2020-12-30

Getting a private mortgage was not easy to be honest, but at least with Mr. Leon it was doable. Thank you for your help!

Davin Mills
2020-12-26

There are a lot of mortgage brokers in toronto to choose from, I was a bit intimidated by that. Don't regret I picked CMB, they took the lead and made sure to cover all the bases

Tracy Wilhoite
2020-11-21

I was renting an apartment for a long time and finally decided to take a big step - get a mortgage instead. Team at certified Mortgage Brokers laid out various options for me. The actual process went smooth and quick, happy with my new home.

Ryder Turcotte
2020-11-16

My wife and I decided to refinance our mortgage and started looking for a mortgage broker in Toronto. There were so many options, so you can imagine how overwhelmed we got! After talking to Leon we decided to proceed with Certified, didn't regret that decision once. They always gave useful recommendations, were attentive, and constantly in touch. And most importantly (for us) they helped us to save some money!!

Lucy Zimmerman
2020-11-11

Vita was great. Helped my son with all the paperwork and got him very good interest rate. On the closing date called to follow up if everything went fine. Quite a pleasant experience. I would recommend this firm for anyone who is looking a mortgage broker.

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