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Secure Financing


Financing your co-ownership property.

Once you have made the decision to co-own and have found partners who share a vision, it is time to estimate how much you can afford and to find a lender. This part of the process may take a bit of work but rest assured it can be done. 

Individuals pursuing a mortgage for a co-owned property follow the exact same process as those pursuing a standard mortgage. There is no formal difference in requirements to secure financing. The banks consider the same information including credit scores, income, Gross Debt Service ratios and Total Debt Service ratios. 

Despite the same requirements and the same process, there is often a hesitance by banks towards co-ownership.  This hesitance is even greater with some banks not interested in co-ownership structures that have more than 4 parties. This is partly because it is rare and out of the box, not because you lack the financial ability. This means that it may take a bit of work to find financing. 

An often-easier route is to work with a mortgage broker who has experience with co-ownership.  Mortgage brokers will negotiate with the standard banks, monoline lenders and alternative lenders to secure the best mortgage products and rates for you. It is important to sit down with them and understand the unique benefits of any mortgage products so you can make an informed decision about what is best for you. 

In working with a mortgage broker, you will most likely have difficulty securing a pre-approval due to lender hesitance but you should be able to secure commitment to a rate hold for a certain period of time. This means that it would be wise to make any offers contingent on financing approval as well as a home inspection, which can save you significant costs for unexpected foundational work. 

Below are links to help you learn more about financing:

Mortgage information from the Government of Canada:
https://www.canada.ca/en/financial-consumer-agency/services/mortgages.html

Mortgage Insurance information
https://www.cmhc-schl.gc.ca/en/co/moloin/index.cfm

Information for first time homebuyers
https://www.ratehub.ca/first-time-home-buyer

Information to help you calculate your affordability range:
https://www.ratehub.ca/how-much-can-i-afford
https://www.rbcroyalbank.com/cgi-bin/mortgage/tools/howmuch/afford.pl

Mortgage product features

The ultimate mortgage checklist: How to get the best possible deal
http://www.theglobeandmail.com/real-estate/mortgages-and-rates/the-ultimate-mortgage-checklist-63-steps-to-navigating-the-best-deal/article14868520/

Ultimate Mortgage Homebuyer's Tool Box
http://lesleysmortgages.com/homebuyers-tool-box/

 

MCAP
https://www.mcap.com/residential-mortgages/customers/products/product-features

TD Bank
https://www.tdcanadatrust.com/products-services/banking/mortgages/flexible-mortgage-payment-features.jsp 

Bank of Montreal
https://www.bmo.com/home/personal/banking/mortgages-loans/mortgage/compare 

Manulife One
http://manulifebankmortgages.ca/manulife-one/how-it-works/