Co-signing a mortgage is not a decision anyone should take lightly.
Last year, I wrote about younger British Columbians’ growing use of co-ownership models to get a foot on the property ladder in our notoriously hot market. Since then, the case for teaming up with friends or family has only strengthened.
While house prices have hardly shifted — provincewide, the average home costs just under $1 million, with a figure closer to $1.3 million for property in Vancouver — the one big change in the market has come in the area of interest rates, which have shot up as the Bank of Canada moved to quell rising inflation.
The result is that homebuyers are facing higher income requirements than ever to convince their mortgage providers that they will be able to afford soaring monthly payments, not to mention the 20-per-cent down payment that must be found for million-dollar homes under mortgage insurance rules.
If you are thinking of co-signing a mortgage, I strongly recommend having a co-ownership agreement to minimize the chances of a legal issue later.
Here are my top four legal considerations when co-signing a mortgage.