With home prices rising, some people may consider going in on a house with their friends and family. They might be thinking of living together, or they may be considering using the home as a vacation destination if it’s a cottage – either to be alternately shared or rented out.
This can be a very wise investment decision! However, when co-buying any type of real estate it’s very important to consider exactly what you want in a property, how it will be paid for, and how the property will be used.
In a TD Canada Trust article, Michelle Snow, the Associate Vice President of Retail Products at TD, says, “Whether buying a home on your own or together in partnership with family members or friends, many of the guiding principles remain the same. Start by setting a realistic budget, talking to a mortgage specialist for advice and taking the time to make an informed decision. The real estate market may move fast, but that doesn’t mean you have to rush your decision.”
She continues, “Once homebuyers set their budget and down payment, they can take their prospective monthly mortgage payment for a test-drive and ‘pay’ into a TFSA or savings account. This two-fold solution allows the homebuyer to see how comfortable the monthly mortgage payment is before locking in, and save for a larger down payment at the same time. For co-purchasers, it opens the line of communication to talk about how these monthly payments will work after the purchase.”
You can read the full article on TD’s website, and it’s a must-read if you’re even considering co-buying a home.