Knowing who will lend to your group, it is now time to compile your financial profile and get yourself and your group ready to approach lenders. While intimidating, being prepared and meticulous in your profiles is key. It’s always better to have more than less.
How Will You Buy As A Group?
Understanding the assets you have to work with as a group is key. Collectively, your group will have:
equity to make a down payment
income to pay the mortgage, taxes, utilities and expenses
debt that needs to be accounted for in the group’s finances
Your Financial Checklist
Your lenders will look at the financial health of each individual situation, and then the group as a whole. To prepare for this, each person in your group must do some work:
Check your credit score. If it needs work (below 680), start the work to improve it.
Ensure your taxes are up to date and paid.
Do a budget.
Determine how much you can contribute in cash and equity to the down payment and closing costs.
Determine your maximum monthly contribution towards your mortgage payment, property taxes and other expenses.
To help you understand your financial profile, fill in the table below. Every member of your group should fill their own individual profiles out.
| Debt | Savings/Equity | Income | |||
|---|---|---|---|---|---|
| Credit Cards | ……………. | RRSPs | ……………. | Employment | ……………. |
| Line of Credit | ……………. | TFSA | ……………. | Other | ……………. |
| Mortgage | ……………. | Cash | ……………. | Investments | ……………. |
| Other | ……………. | Assets | ……………. | ……………. | |
| Total | ……………. | Total | ……………. | Total | ……………. |
Then Review as a Group:
Combine the histories and budgets into a group budget
Determine your group’s total available funds for a down payment and closing costs.
Determine your groups’ income for total monthly mortgage payments
Once you have completed your individual financial picture, combine your debt, savings and income information to create this snapshot of your group’s collective finances:
| Member Name | Debt | Savings | Income |
|---|---|---|---|
| Member 1 | …………… | …………… | …………… |
| Member 2 | |||
| Member 3 | |||
| Member 4 | |||
| Total |
Check out the next part where we show you an example budget and how to bring everything together!
How Do You Build Your Financial Model?
Click on the sections below to learn more.
What are all the Steps to Becoming a Co-owner?
Click on the links below for all the blog articles related to each step.
“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.”
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