Curious as to why you’re immediately looking at a 20% down options vs a low down payment 5% conventional or 3.5% FHA option? When I first started educating myself, my first thought was to partner for the same reason you explained...however I quickly learned that the benefits of going in solo into a house hack deal far outweigh the cons. You’d be giving away equity on a property that you have options to leverage and get into for cheaper than most.
If you have purchased a home already, you can't have your name on the deed and use the 5% first time deal. I tried with my (now wife, then fiancee) and it was very clearly not allowed. You COULD put down only 10% as an owner occupied if your partner is living there. However, if you haven't bought a home, you can partner with someone else who hasn't bought a home and put down only 5% - I did this with a friend.
The other option is to NOT have your name on the deed or mortgage, but if you choose to go this route have a rock solid written agreement with a person you trust completely. I would be hesitant to do this.
@Daniel Ortiz - those loans don't exist in Canada unless you're a first time homebuyer. 5% for owner occupied first time homebuyer, 10% for owner occupied under 500K, otherwise 20% (simplified).
@Chris Habets - Didn't even realize Dan was investing in Canada. Learning more and more every day! Thanks for the insight about loan options.
Somehow my response got lost - but ya, exactly what @Chris Habets said.
@Account Closed I'm having a very similar challenge. While relatively new to this, I've spent the last month really upping my education, creating my plan, focus areas, etc. What I'm currently missing is examples of how to actually structure deals that are using other peoples money. What do I offer them? How do I keep the properties profitable for all involved? This is the area that I'm focusing on right - as I believe that I may have come across some candidate deals - and I'm unsure that I will have the capital for all of them
We are relatively close - I would be open to getting together and having a discussion and sharing ideas and examples - that actually goes for anyone.
Yay! First post on BP!
You will need to convince the lender you will live in the house if you want to buy with less than 20% down. You will be required to put down 5% on the first $500,000 of the purchase price and 10% of the purchase price above $500,000. PM me if you would like me to connect you with mortgage broker in Alberta which can help you get approved to buy your next house with less than 20% down.
An insured mortgage at 95% LTV (5% down payment) is only available on owner occupied SFHs and duplexes. On a triplex or quadriplex, the maximum LTV is 90% (10% down payment).
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