Nina Asusa, Broker

Nina's journey in real estate began in the early 1990's where her passion for real-estate quickly grew from an investor and home renovator, to where she is today. In 2006*, Nina launched her full-time real estate career and quickly found herself helping her clients, who many became friends, achieve not just any lifestyle, but the lifestyle they wanted for themselves. Her model was and always will be ''Don't follow someone else's story; create your own story, create your own lifestyle, because 'home is where your story begins.'''  From a single realtor, to developing a strong team of realtors she personally mentored and later owning a real estate brokerage firm, Nina's focus remained the same. She continues to channel her high energy and extensive experience into understanding her client's needs and wants, and in helping them in their real estate journey. Nina's greatest honour is the trust others grant her when welcoming her in their life's journey.

Thinking About Co-Owning a Home? What You Should Know

By: Nina Asusa

Thinking About Co-Owning a Home? What You Should Know

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Thinking About Co-Owning a Home? What You Should Know

With housing prices in Ontario rising to heights never seen before, more people are thinking about co-owning a home. It’s a creative solution to a growing problem of affordability in this country. Co-ownership is a shared living arrangement where two or more people own and live in a home together, typically friends, couples or family. They may share living spaces like kitchens and bathrooms or the home may be divided into separate units. While co-ownership is not for everyone, there are some benefits of sharing a house with those whose financial plans and home ownership goals align with your own. 

Benefits of Co-Ownership Housing

1. Affordability: Co-owning a home with multiple people or couples allows you to pool your resources and make home ownership more affordable. It provides people with a way to build equity, who wouldn’t necessarily be able to be homeowners without co-ownership. 

2. Location: Living with multiple people gives you the option to afford a home in neighbourhoods you couldn’t afford on your own. You’ll be able to find more options within your budget, especially if your goal is to move to a residential area with predominantly single detached homes.

3. Community: With co-ownership, you can foster a sense of community with your housemates. You may pick up hobbies you haven't tried before, start cooking or gardening and have social gatherings with new people you likely wouldn’t have met otherwise.

Cons of Co-Ownership Housing

1. All co-owners on the mortgage loan are responsible for paying the debt, even if one can’t pay their share. This means that if one of the co-buyers can’t make their share of the payment, the burden falls on the other co-buyers. It’s important you’re aware of the other co-buyers’ financial situations and if you have any doubt they’ll be able to make their payments, it’s probably best not to move ahead with them.

2. All co-owners’ financials will be evaluated, including their credit reports. The amount of down payment that the co-owners can make will have a huge impact on the interest rate and mortgage terms they can secure. Just like more traditional mortgage scenarios, a prime lender is focused on loan to value (how much of a home’s purchase price is loaned by the bank in comparison to the overall value of the home). The best rates are secured when mortgages have a loan to value of less than 65%. However, even insured mortgages (where the borrower has less than 20% of a down payment) can negotiate really favourable rates with the A Lender banks. When one borrower has a lesser than ideal credit score, there may be an option to work with a B Lender, but in that case the mortgage rate and terms could be impacted.

3. Issues can arise if one person wants to sell their share and the other parties don’t. If the home has to be sold due to life changes, disagreement, financial hardship or any other reason prior to the end of the term, the home will have to be sold. It will either be sold to the remaining party or in a bonafide sale to another purchaser. If one party buys out the other party, it may result in penalties to break the existing mortgage, or in some cases, the remaining borrower being ineligible for their own new mortgage. 
Top 4 Tips To Consider Before Purchasing

1. Know your exit plan. Discuss what will happen if one person wants to move out. Will the home be sold, will the person remaining pay them out, will they be able to pay them out? 
2. Have a legal written agreement detailing the monetary contribution going into the agreement and how the division of assets will be at the end of the contract. 
3. Work with professionals in the industry from mortgage brokers and bank representatives to real estate agents and lawyers. Make sure they are honest and ethical individuals who care about your situation.
4. Have a timeline and basic rules to the living arrangement so everyone involved is aware of exactly what they’re getting into.

Options for First Time Buyers and Mortgage Considerations

First-Time Buyer Incentive
The First-Time Buyer incentive is a program through the Government of Canada that makes homeownership more affordable. It helps qualified first time buyers reduce their monthly mortgage payments by providing a shared equity mortgage with the government. The program offers 5 or 10% of the home’s purchase price to put toward a down payment, which lowers your mortgage carrying costs. You pay back the same percentage of the value of your home when you sell it or within a 25-year period.

RRSP Home Buyers Plan
If you haven’t purchased a home in the last four years, you may qualify for the RRSP Home Buyers Plan. This plan allows you to borrow up to $35,000 tax-free from your RRSP to fund your down payment. You must start repaying the amount borrowed two years after you buy, and you have a 15-year period to complete the repayment process. 

Look for a Flexible Mortgage
Although going into co-ownership all parties may think they’ll spend a long time together, individual circumstances can change this. Someone may get a new job and have to move, or one party could meet someone they want to move out with sooner than they were planning to. Consider a variable rate mortgage over a fixed-rate mortgage. Variable rate mortgages are preferable for co-ownership arrangements as they offer more flexibility and typically have smaller penalties if you need to break your mortgage early. 

Purchasing a home and getting a foot in the real estate door could be the right move for you, but choose who you’ll share this financial responsibility with carefully. Make sure your own plans and goals are clear, weigh out the benefits discussed, have open and frank discussions, put things down in writing, and keep your end of the agreement. It may not be the easiest course to home ownership, but it could get the ball rolling.