As home prices in big cities around Canada become inaccessible for the majority of young would-be buyers, co-buying has become increasingly popular. For some, it might be the only way to afford homeownership.
If you have co-buying on the mind, take the following factors into consideration:
It makes homeownership possible. You can co-buy with three other people—up to four names can be on the mortgage. This means that two couples could join together to buy a large home that would otherwise be out of their reach. Or, two friends could buy a condo together instead of renting one. Alternatively, a parent can help their child buy their first home. It means all payments and fees are split equally among the various owners. While it might be impossible to buy on your own, if you’re willing to share, many more doors will open.
It allows you to stay in the area you want to live in. While you might not be able to afford a home on your own, if you join forces with someone, you can manage to stay in your preferred city, rather than having to move to the suburbs and commute in.
It’s a way out of the rental grind. If homeownership is a dream you’ve always had, but has never felt possible due to the hot market, co-buying allows you to move toward that dream a little faster. Suddenly, that down payment isn’t unreachable when you’re splitting it with someone else. And now, instead of paying rent that makes someone else richer, you’ll be investing each monthly payment in your own future.
Remember to get everything in writing. As thrilling as it might be to own your first home, co-owning is not without its risks. Before entering into such an agreement with friends or family, it’s important to have every possible scenario ironed out. What if you get sick of living with this person? What if someone gets a new job and has to move to another city? What if your partner loses their job and can’t pay their share of the mortgage? While you’ll still be on the line for the payment, no matter the situation, be sure to have every possibility thought through so that you both know what to expect.