How To Get A Joint Mortgage

How to Get a Joint Mortgage

With inflation taking a toll on the prices of everything in the Canadian economy, it is becoming more challenging each and every day to own a property in Canada. The renewed mortgage rules are also very strict, which means that it has now become even more difficult to take a mortgage that is large enough to purchase your own house.

However, there is one type of mortgage that can solve this problem to some extent – joint mortgages. So, if you’re facing some struggles in order to secure a mortgage that is large enough for buying a property in Canada, you should start learning how to get a joint mortgage for yourself!

There could be multiple benefits to learning how to get a joint mortgage in Canada. For instance, it would become easier for you to buy a home that you weren’t previously able to. It doesn’t matter if you’re a seasonal property buyer or a first-timer, it’s always better to know everything about joint mortgages before you head right into it.

You must be wondering where you could figure out how to get a joint mortgage, and luckily, you’re in the right place! In this article, we will discuss everything that you could possibly need to know about joint mortgages.

What is a joint mortgage?

When you begin to learn how to get a joint mortgage, it’s crucial to know what it actually means. In simple terms, when you sign up for a joint mortgage, you and your partner(s) are basically applying for the mortgage together. A joint mortgage can have up to 3 partners in it, and people usually prefer getting joint mortgages because it helps them secure better mortgage rates and terms.

If you’re trying to understand how to get a joint mortgage, you should also know that a joint mortgage does not mean joint ownership. When you apply for a joint mortgage, all the partners get a thorough check over their assets and liabilities, but as one whole entity and not two different individuals. This is essentially very helpful when you’re trying to secure a larger loan or a mortgage, but when it comes to debts, they would only increase if combined together.

However, you wouldn’t have to worry about the debt if you and your partner have been paying your dues responsibly – your credit scores are a very important reflection of that. Some of the lenders will choose to look at the lower score of the partners in a joint mortgage, some of them might look at the middle score of both partners, while the rest might also look at the credit score of the partner with the highest income.

For this reason, when you learn how to get a joint mortgage, it’s also very important to have your credit reports sorted out so that the lender does not cause problems because of it. You would also have to talk to your lender to see what exactly they’re looking for in the credit reports of you and your partner(s).

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How does a joint mortgage work?

When you and your partner(s) sit down and research how to get a joint mortgage, you will find out that all the co-mortgagees have legal responsibility in the mortgage loan. In this scenario, you should also know that if you and your partner have decided to go in the half ratio of the mortgage loan, and your friend ends up going broke, then the lender would have the ability to collect the entire loan from you!

As mentioned above, the lender will carry out a background check on you and your partner both. They will specifically look at the credit score and the risk you both have as borrowers, and then decide if the risk is worth it or not. This will also play a huge role in deciding the rates and terms of your mortgage too. However, you wouldn’t need to worry if your partner has a good credit score and has a good income too. It would only hurt your chances of receiving a loan if you and your partner have bad credit reports – so when you learn how to get a joint mortgage, keep this in mind!

The first steps in learning how to get a joint mortgage include filing an application for the joint mortgage. In this application, the lender will judge your credentials by looking at you and your partner’s income, credit scores, debt, assets in reserve, and employment history.

If your lender decides that the application is strong enough to get approved, you will be asked to sign the promissory note. Once you’ve signed that, you will officially become responsible for making the payments for the mortgage. Your lender will generally collect the monthly payment from one of you, so you and your partner should decide who sends the payment every month.

When you learn how to get a joint mortgage, it’s important to know that you should only get a mortgage with the person you trust. It should only be a person who is responsible enough to take this ordeal seriously, because if he doesn’t, then he will also drag you down with his irresponsibility. Most of the time, couples take the joint mortgage together to buy a house but it doesn’t have to be your husband/wife. You can also secure a joint mortgage with your family, friends, or co-investors too.

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Why should you get a joint mortgage?

There are many reasons why one should consider learning how to get a joint mortgage. Let’s discuss the main ones below.

Lower fees with a larger down payment

One of the main advantages of getting a joint mortgage includes paying less on average. If you reside in Canada, you would have to pay 5% of the purchasing price as the down payment of your mortgage. Lenders usually keep a mortgage default insurance in an account for safety – this is usually done in the event that you and your partners are unable to pay off your debt and default on the loan.

Hence, when you learn how to get a joint mortgage and ask your friends and family if they want an in on it, they could help you pay the down payment and bring some funds into it. Now, if you end up paying a larger amount in down payment, you could decrease your mortgage default insurance premiums and increase your equity over the home.

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Increase your purchasing power

If you’re wondering how much mortgage you’d be able to afford when you’re taking a loan on your own and when you’re taking one up as a joint mortgage, the amount in a joint mortgage would be greater than the former. When you and your partner submit your applications to get a joint mortgage, both of your financial situations will be considered and then a decision will be made.

In this scenario, the amount accumulated in a joint mortgage is actually higher in general. When you research how to get a joint mortgage and the large amounts involved, you will find out that this is because instead of one, there will either be two or three people available to make the monthly payment. That wouldn’t be much of a risk and if the partners have a very good financial position, they might be able to get better rates too! This leads to an increase in affordability if you’re looking to purchase a house.

Other than that, essentially, a joint mortgage would mean that there are increased odds of the mortgage loan being approved as there are more people available to afford the loan. When you learn how to get a joint mortgage, you would also learn that income plays a huge role in determining whether a person would pay back the loan or not. For this reason, combining the ability of more people together would increase the odds and reduce the risk.

Responsibilities are shared too

While it is mentioned clearly above that a joint mortgage does not mean joint ownership, it could work that way too. If you’re buying a house with your friends or family and you are sharing the responsibility for the house too, the maintenance costs and upkeep costs can also be shared by everyone. This wouldn’t be much of a burden on just one person because two or three people combined would be able to afford the maintenance cost of a house if they end up taking a mortgage to buy it.

However, do keep in mind that this pointer is only applicable in joint mortgages where all parties have agreed to share the responsibility for the house. If you take the joint mortgage with your parents, they might insist that you take responsibility for the maintenance cost of your house.

Wrapping it up

Deciding that you want to get a joint mortgage would be an excellent choice if you plan on buying property in Canada. It is an affordable and less risky option than taking a loan on yourself, by yourself. Consider getting a joint mortgage today if you want to benefit from better rates and terms!

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FAQs aboutHow To Get A Joint Mortgage

What is a joint mortgage?

Joint Mortgage is when two or more people share a mortgage loan. The co-owners of the home share the same legal responsibility for the loan.

Who owns the house in a joint mortgage?

A joint ownership mortgage means both people are responsible for making payments of the loan, if one can’t pay then the other will have to make up for it.

What's the benefit of a joint mortgage?

The main advantage of a joint mortgage is that you can borrow more money on the loan compared to you doing it by yourself.

What happens if you have a joint mortgage and separate?

It doesn’t matter whether you live together or decide to separate, you must pay the loan together.

Can a joint mortgage be transferred to one person?

Yes. If both of the co-owners agree to this, they are able to transfer the joint mortgage to one person.


May 30, 2021
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