A survey conducted by TD found there’s been a shift in the way Canadians are purchasing new homes.
Within the last two years, the survey found a quarter of Canadians who purchased a home did so on their own. Four out of 10 respondents surveyed said in the event of purchasing either a residence or vacation home with family or friends it was a great way to get started on the road to ownership.
“Whether buying a home on your own or together in partnership with family members or friends, many of the guiding principles remain the same,” said Michelle Snow, associate vice president, Retail Products at TD. “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.”
TD recommends whichever home purchasing route you choose to take, the first step is to figure out a budget you’re comfortable with and what your down payment will be. If purchasing as a group, there’s benefits to the larger down payment which may result. If a group purchasing a home put down 20 per cent or more, TD said they may avoid paying for mortgage default insurance.
“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 (tax free savings account) or savings account,” said Snow. “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.
“It opens the line of communication to talk about how these monthly payments will work after the purchase.”
Once budget and down payment are discussed, Snow said co-purchasers also need to agree on what they’re looking for in a property such as will the residence be a house or condo? Or if the property is to be used for vacation, will it be in the woods or on the water?
“The last thing new homeowners want is an unwelcome surprise when they’re about to sign on the dotted line,” Snow said. “Whether purchasing alone, or with a copurchaser, a mortgage specialist can help navigate home financing questions well before they’ve entered the house hunt, so they can make informed decisions that can save money and stress in the long run.”