TD advises on specific considerations when taking a less conventional approach to buying property
TORONTO, March 25, 2014 /CNW/ - Today's homebuyers don't always look like the traditional nuclear family of the past. As a recent TD survey discovered, a quarter of Canadians who bought a home in the last 24 months - or are planning to in the near future - did so on their own. Furthermore, four in ten Canadians think buying property - whether a primary residence or vacation home - with friends or family members is a great way to get started. With this shift towards non-traditional ways of purchasing property, planning carefully can help avoid potential bumps on the road.
"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."
Whether buying alone or with someone else, the first step is to decide how much you are comfortable spending, and what the down payment will be. Homebuyers pooling their resources may be able to make a larger down payment on their purchase, and there are benefits to this. For example, homebuyers who put down 20 per cent or more may avoid paying for mortgage default insurance. The premiums for mortgage default insurance are calculated as a percentage of the mortgage and paid up front or by adding it to the principal portion of the mortgage. Eliminating or decreasing this premium can result in significant savings over the lifetime of the mortgage.