While Joint Mortgages may sound all attractive, not all people are in favour of applying for them due to various reasons depending on each case. Some may not find them appealing due to a large sum that they have to keep out as a down payment, some may want to avoid a bad credit mortgage, and there are yet others who may want to live in a more expensive residential area than the one that is being offered. Whatever the reason for an individual or to-be joint owner to not opt for a joint mortgage, they do have other options which they can explore. We list them here.
Co-signing of a mortgage
Those who are reluctant to sign up for a joint mortgage could consider co-signing a mortgage instead. Co-signing a mortgage is more like a family member helping you out by backing your mortgage application with their better finances. This helping family member would be letting you use their credit score and other financial information to your mortgage application. This member will agree to be responsible financially in case you are not able to pay the monthly amount due towards your mortgage. This member does not put a part of money towards the down payment and neither does he or she contribute towards the maintenance of the house or property towards which you are taking the mortgage.
Buy a cheaper property or save a larger down payment
Instead of going for a joint mortgage you could alternatively buy an inexpensive home. For example you could opt for a condo in place of a free-standing home, or even buy a smaller home, or buy a home in a less expensive residential area. This option has its own downside as you may not be buying your dream house but your mortgage payments will not be an everyday struggle as this would most likely be within your budget.
If a joint or co-signed mortgage is not an option for you, you can also consider saving for a larger down payment. This, in our opinion, is a basic but the finest way to purchase a bigger dream home. You can borrow more with this method on the same size mortgage.
First-time home buyers incentive
The first-time home buyer’s incentive by the federal government is a program that gives more purchasing power to the first time buyers. In simple terms it is nothing but an equity mortgage which you share with the federal government. The government will pay and own up to 10% of the cost of the home. If this is your first time buying a Canadian home, it would be advisable to shop around and look for all kinds of first-time home buyer programs which you can avail, and this includes the First Time Home Buyers' Tax Credit.
If you are looking at options other than joint mortgage and are unsure what suits your financial needs best, do write to LendX. We are happy to help.