Are you looking for the very best residential mortgage advisor in the GTA? Many youth in the Greater Toronto Area dream of buying a home one day. But property prices and the size of down payments are so high that the prospect of getting even that first toehold on the property ladder can seem like a fading mirage. One property that looks even more distant is the house your parents live in. After all, both they and you have mortgages, so why not pool your resources to purchase this new project?
Call it the multigenerational mortgage. Buying property with your parents is a good deal for those who struggle to save for it because you spread the costs between your current and previous generations. It’s a way for you and them to benefit from the hallmarks of home ownership via a multigenerational mortgage.
SPLITS THE MORTGAGE
It requires more administration, but you benefit from the advantages of home ownership with the help of your parents.
MULTIGENERATIONAL MORTGAGE
With the very best residential mortgage advisor in the GTA working on your side, you take out a standard mortgage in your name, and because your parents are also taking on the responsibility, you extend the period of the mortgage and pay a lower cost.
THE KEY BENEFITS OF A MULTIGENERATIONAL MORTGAGE
Affordability is the major force propelling multigenerational mortgages. In Toronto’s sweltering real estate market, starter homes require down payments of several hundred thousand dollars, making the initial investment far more achievable after parents and children put their funds together.
This affordability uplift gives people who feel locked out of home ownership completely on one salary a shot at the market years earlier than going it alone, while parents provide a chance for their children to get that all-important first brick in the garden as well as benefiting from the investment.
And beyond the financial benefits, a multigenerational mortgage may offer other advantages, too. In some cases, it could pave the way for multi-generational living, keeping family members close together; in others, it may serve as a temporary hedge—the young buyers steadily building up their equity until they’re able to strike out on their own in a few years.
MORTGAGE OPTIONS FOR MULTIGENERATIONAL BUYERS
Joint Borrower, Single Housing Expense
For multigenerational buyers, one of the simplest mortgage structures is the joint borrower, single housing expense mortgage. It involves placing both buyers and their parents on the mortgage as co-borrowers; the payments and liabilities are shared equally by all borrowers, but the loan is for a single property.
Joint Borrower, Separate Properties
Another workaround is the joint borrower, separate property mortgage product: here, the cohort co-borrows together but takes out two separate mortgage loans: one for the buyers’ new house and one for the parents (if they have one) existing home. In this way, both families build up equity in distinct properties but are able to take on the mortgage together.
Guarantor or Co-Signer Mortgages
For other parents, a guarantor or co-signer mortgage arguably makes more sense. Some mortgage products of this nature require that the buyers indicate that they intend to remove the parents as guarantors upon the buyers having gained equity (enough percentage of household ownership to outweigh the parents financially).
Parents are essentially helping to qualify with higher creditworthiness, but they are not on title or deed. The buyers are entirely responsible for monthly mortgage payments, but the parents’ income is used as a qualifier. Call Dream Home Financing Solutions now to schedule a consultation with the very best residential mortgage advisor in the GTA!
