Shared Equity - A smart method to get an affordable house in Vancouver

Some tips for buying house in Vancouver and ideas about "Shared Equity" and co-ownership.

New York City, NY (prHWY.com) September 11, 2012 - Vancouver, BC - Vancouver has been a leader in the laneway housing bylaw. Even though the trend took its own sweet while, the advantages are evident. In laneway homes, you can have your parents or your adult kids stay, and it can also be put up for rent. You could even renovate it and move in and set up your old home for rent. The Vancouver buy home options are amazing.

Also, it is more flexible than an apartment - and all of this in under $300,000. However, if you don't have some property to put it on, how do you go about it?

The answer is: take some tenants in common.

This is known as "shared equity."

Investment in shared equity

Purchasing a home with your spouse makes you "joint tenants". So in case of a mishap with either one, the property goes to the other one. But this is not the only way to title the property.

So if you have any Vancouver buy house plans, the next best thing to go with is the shared equity. For example, if there's a house you really like, a three-storied beauty in a great area but costing you a whopping $1,000,000, which is way over, say, your $400,000 budget, the thing to do would be to bring a couple of friends along for a second visit.

Now, together with your friends, go over the house. If they agree with you that it could be a great purchase after a little reworking, half your work is done. Now, the next step would be to decide who prefers which area in the house. There may be one who prefers the laneway, while one prefers a suite in the house. It is important that everyone accepts and agrees to live in some or the other part of the house.

You can draw up an agreement at this point after some required math. Supposing that one takes the suite, the other the laneway and the yet another, the main space, the house can be divided and you can now afford to purchase the house. It will require you to sign a contract with your friends regarding the house.

Next, you can employ a company for a design and get your home ready to be shifted into within 4 months. It will require additional expenses which you could be divided reasonably by square footage or some other method. But even considering that you spend equally, and spend as much as $150,000 in the design and renovation, and add a few more extra expenses, you will still probably spend only as much as $400,000.

The division of the expenses will totally depend on the agreement you form with your friends. Now, you will have your own shared equity investment or co-ownership. It is imperative that your agreement/contract exists on paper though the details are completely up to you.

It may clearly specify, thoroughly, the interest of each owner in the property, in ratio or percentage like 25/25/50. You may also want to mention the splitting of expenses three-ways as you will have to decide the percentage or ratio of amount each owner must contribute to the payments like property tax and insurance as well as property transfer tax; bills like those of sewer, water, electricity; repairs and renovations; legal fees; and the maintenance sum. It is not essential that you put it all on paper, but it is definitely advisable.

Financing co-ownership

The next thing to look for is finance. The service of "Mixer Mortgage" is offered by Vancity. It allows family members, friends or partners to share all the expenses of purchasing a home, both one-time and monthly costs like deposit, mortgage, etc.

Also, Scotiabank, RBC Royal Bank, TD Canada Trust, etc. and similar organizations offer "co-borrower mortgages", allowing people to purchase property together. The interested parties are required to fill a co-ownership agreement and get life and home insurance.

Home ownership as tenants in common

This is how, co-owning properties helps you buy homes you wouldn't be able to afford otherwise. You can make arrangements and get it painted as you like with no worries of facing objection and eviction.

It is also much more convenient for people than having to commute everyday to their workplace, as they are living near work, which is a great step in saving the environment.

Additionally, you should know that being tenants in common implies that in case of any mishap (like death) with one owner, the portion of property owned by him goes to his estate, as the contract would usually dictate, and not to the fellow tenants. You can use the contract to protect yourself in various situations: and you must do them before you make your purchase.

So these were some of the most practical and affordable Vancouver buy house schemes which have become quite popular these days.

For more information on Housing in Vancouver, please visit http://www.squidoo.com/housing-in-vancouver or http://www.house-vancouver.com/

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