An interesting new homebuying trend emerging among millennials is home purchases that are completed with a friend. It’s a creative solution to the housing market given tough qualifying rules and high prices. Pooling your resources is a great way to take you from the fringes of homeownership to landing what you really want and getting a start on wealth building.
Here are a few of the things you’ll want to talk about before you get started:
- Detached, condo or something else? How many bedrooms/bathrooms and what amenities do you both want? Are you the fixer-upper types or do you want move-in ready?
- What can you both afford? Remember to factor in closing costs including lawyer’s fees. Put a budget together that includes property taxes, any condo fees, heat and hydro, internet, cable, anticipated maintenance costs, and household expenses.
Next, talk about how co-ownership will work, and consider getting legal advice and a legal agreement outlining roles and responsibilities, including:
- whether ownership is divided equally among the buyers, or by some other percentage based on what you bring to the purchase and ongoing costs;
- how you plan to divide and use the space within the home, and any mechanism for dealing with conflicts;
- how you are going to divide ongoing and one-off expenses;
- how you want to handle household chores, repairs and maintenance;
- what happens if one co-owner wants to sell their share for any reason? Will the other owner(s) have first right of refusal to buy their share? And how will you establish a fair market value for that share?
- what if one person is unable to afford to continue to pay his/her share of the mortgage for any reason?
Today many young millennials are getting their money working for them early through property partnerships with friends. Contact the team at MiMortgage.ca at 1.866.452.1100 to speak to an expert about mortgage financing. A little pre-planning and you could be hosting your joint housewarming party!