Building Your Financial Model: Creating Your Budget

Budgets and finances can be confusing and complicated. Not to mention it can get very stressful when comparing your answers to your group. 

To help you out, we’ve created an example of how to create a budget and financial profile for your group so that you’re able to create your own group budget.

The McGill Group Example

Let’s call this group the “McGill” group, because they all met at McGill University. 

They are: Tom, Lara, Serena and Kativa.

Tom and Lara are married and have 1 child. Serena and Kativa are both single women. Serena is Lara’s sister and uses a wheelchair. All adults have full time jobs. 

McGill Group	Debt	Savings	Income
Tom and Lara	$40,000 Student loan	$125,000	$275,000
Serena	0	$500,000	$50,000
Kativa	$20,000	$75,000	$125,000
TOTAL	$60,000	$700,000	$450,000

The McGill group is in a good position. They can likely afford a home that costs more than $2 million dollars, and they also need to factor in the cost of potential renovations to make their house wheelchair accessible. 

Using an estimate of a home at a price of $2,200,000 with an additional $200,000 budgeted for renovations, here is the McGill group’s estimated closing costs and budget:

Purchase Price	$2,200,000 + $200,000 (renovations)
Appraisal	$500
Land Transfer Tax – Ontario	$41,475
Land Transfer Tax – Toronto	$41,475
Lawyer’s Fees	$2,000
Co-Purchasing Agreement	$2,500
Adjustments	$1,000
TOTAL CLOSING COSTS	$88,950

Purchase Price	$2,200,000 + $200,000 (renovations)	Tom and Lara’s Share	Serena’s Share	Kativa’s Share
		50%	25%	25%
Down Payment	$480,000	$240,000	$120,000	$120,000
Closing Costs	$88,950	$29,650	$29,650	$29,650
TOTAL Mortgage	$1,920,000
Monthly Mortgage (2.90% @ 25 years amortization)	$9000	$4500	$2250	$2250

Now It’s Your Turn:

From your group finances snapshot, you can determine your group’s total available funds for a down payment and closing costs, and your total monthly income for mortgage payments and expenses. Working backwards from this information, create a draft purchasing budget below, mapping out the share of each member in your group. Refer to the McGill Group’s budget and closing costs estimate as an example.

Purchase price	Total
% Share	...
Appraisal	...
Land Transfer Tax- Ontario	...
Land Transfer Tax - Toronto	...
Lawyer’s Fees	...
Purchasing Agreement	...
Contingency	...
Total Closing Costs	...

Purchase Price	Total	Member	Member	Member	Member
% Share
Down Payment
Closing Costs
Total Mortgage
Monthly Mortgage %
@ 25yrs Amortization

Now that you have your financial budget for your group, the last step is to get the final pieces together.

How Do You Build Your Financial Model?

Click on the sections below to learn more.

1. Introduction to Building Your Financial Model

2. What’s In A Mortgage

3. Who Will Lend To You?

4. Get Your Financial Profile Ready!

5. Creating Your Budget

6. Combine-Leverage-Split

7. Summary & Next Steps

What are all the Steps to Becoming a Co-owner?

Click on the links below for all the blog articles related to each step.

1. Familiarize Yourself with Co-Ownership

2. Finding Your Purchasing Group

3. Building Your Financial Model

4. Creating Your Group Agreement

5. Making Your Legal Agreement

6. Finding Your Property

“Each member of the group needs to be completely transparent – not only about their assets and income, but also about their liabilities. Personal consumer debt factors into the size of mortgage available.”

— Lesley Tenaglia, Fuse/LT Mortgages

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