Can I Add Someone to My Mortgage at Renewal?
Understanding Mortgage Renewal and Co-Borrowers
When your mortgage term ends, you’ll enter the renewal process, offering the opportunity to renegotiate terms or explore other lenders. One potential change during this time is adding a co-borrower to your mortgage.
Why Add a Co-Borrower?
- Shared Financial Responsibility: Dividing mortgage payments between multiple individuals can alleviate financial strain.
- Improved Qualification: A co-borrower with a strong credit score or income can enhance your chances of securing a better mortgage rate.
- Joint Ownership: Adding a co-borrower can make them a joint owner of the property, which can be beneficial for estate planning purposes.
- Business or Investment Partnerships: For properties used for business or investment, adding a co-borrower can align financial responsibilities with ownership.
The Process of Adding a Co-Borrower
- Lender Approval: Inform your lender of your intention to add a co-borrower. The new individual will need to undergo a thorough qualification process, including credit checks and income verification.
- Documentation: Provide the necessary documentation for the new co-borrower, such as proof of income, identification, and credit history.
- Mortgage Agreement Update: If approved, your lender will create a new mortgage agreement that includes the co-borrower.
Important Considerations
- Legal Implications: Adding a co-borrower can have legal implications, such as affecting property ownership rights and estate planning.
- Financial Responsibility: All co-borrowers are equally responsible for the mortgage payments, regardless of their contribution to the down payment or income.
- Credit Impact: Adding a co-borrower can impact both parties’ credit scores.
- Mortgage Rates: The addition of a co-borrower may influence your mortgage rate, potentially leading to a better or worse rate depending on the individual’s financial profile.
Consulting with a Mortgage Professional
Before making any decisions, it’s highly recommended to consult with a licensed mortgage broker in Brampton. They can provide expert guidance, assess your specific situation, and help you determine if adding a co-borrower is the right choice for your mortgage renewal.
Reputable Resources:
- Financial Consumer Agency of Canada: https://www.canada.ca/en/financial-consumer-agency.html
- Real Estate Council of Ontario: https://www.reco.on.ca/
- Canadian Mortgage and Housing Corporation: https://www.cmhc-schl.gc.ca/
Ottawa’s 30-Year Amortization Extension: A Boost for Homeownership
Ottawa Extends Amortization to 30 Years: A Game-Changer for First-Time Homebuyers
Introduction:
In a bid to make homeownership more accessible, Ottawa recently announced an extension of the amortization period for insured mortgages to 30 years for first-time homebuyers purchasing newly constructed homes. This significant change aims to ease the financial burden on younger Canadians navigating a challenging housing market.
Key Points:
Amortization Extension: The maximum amortization period for insured mortgages has been increased from 25 to 30 years for first-time homebuyers purchasing new homes.
Reduced Monthly Payments: This extension allows homebuyers to spread their mortgage payments over a longer period, resulting in lower monthly costs.
RRSP Withdrawal Increase: Ottawa has also raised the amount first-time homebuyers can withdraw from their RRSPs for a down payment, from $35,000 to $60,000.
Government’s Housing Goals: These measures align with the government’s ambitious target of building 5.8 million new homes in the next decade.
Expert Opinions:
Lauren van den Berg, CEO of Mortgage Professionals Canada: Praises the extension but calls for it to be expanded to all Canadians.
Victor Tran, mortgage specialist at Ratesdotca: Raises concerns about the effectiveness of the policy in high-priced markets.
Kevin Lee, CEO of Canadian Home Builders’ Association: Views the change as a potential “game changer” for the housing market.
Impact on Homeownership:
The amortization extension and RRSP withdrawal increase are expected to provide significant relief for first-time homebuyers in Canada. However, addressing the broader housing crisis requires a comprehensive approach, including increasing housing supply and addressing affordability challenges in high-cost markets.
Additional Resources:
Government of Canada: https://www.canada.ca/en/services/finance/manage/housing.html
Mortgage Professionals Canada: https://www.facebook.com/CanadianMortgageProfessionalsInc/
Ratesdotca: https://www.trustpilot.com/review/rates.ca
Canadian Home Builders’ Association: https://www.chba.ca/