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.
"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 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. For
co-purchasers, it opens the line of communication to talk about how
these monthly payments will work after the purchase."
While agreeing on a budget and down payment are essential, the
conversation shouldn't stop there, Snow advises. Co-purchasers also
need to agree on the key characteristics they want in a property, and
what they are and are not willing to compromise on. For example, will
the primary residence be a house or condominium? If it's a second home
to be used as a vacation destination, will it be a cabin in the woods
or a cottage by the water? Once these decisions are made, consider how
the associated costs, like taxes, insurance, utilities, repairs and
maintenance fees will fit into the overall budget.
"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 co-purchaser, 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."
For more information, tools and resources on home ownership, visit www.tdcanadatrust.com/firsthome
About the TD Canada Trust Buying a House Poll
TD Canada Trust commissioned Environics Research Group to conduct an online custom survey of 6,015 Canadians aged 18 years and
older. Responses were collected between February 11 and 25, 2014.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5
million customers. We provide a wide range of products and services
from chequing and savings accounts, to credit cards, mortgages and
business banking, to credit protection and travel medical insurance, as
well as advice on managing everyday finances. TD Canada Trust makes
banking comfortable with award-winning service and convenience through
24/7 mobile, internet, telephone and ATM banking, as well as in over
1,100 branches, with convenient hours to serve customers better. For
more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the
sixth largest bank in North America.
SOURCE: TD Canada Trust
For further information:
TD Bank Group