June 13, 2024
The Complete Guide to Shared Ownership with Ourboro
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Manzeel is an award-winning Mortgage Broker and the Owner of the Toronto-based mortgage, Everything Mortgages.
With 16 years of experience in the Canadian mortgage industry and a formal background in mortgage underwriting, Manzeel’s lending expertise gives him unique insight into whether a deal is feasible which empowers his clients to make more informed lending decisions faster.
He has been recognized as one of Canada’s Top 10 Mortgage Brokers by the national Canadian Mortgage Professionals (CMP) Association. Him and his team of 18 mortgage agents are proud to offer a mortgage experience that's built on honesty, trust, and integrity. He prides himself on the brokerage’s dedication to deliver an excellent client experience throughout the entire home loan process from pre-approval to post-funding.
Since moving to Toronto in 1998, Manzeel has successfully launched and scaled several businesses from the ground up, ranging from a mortgage brokerage and a vast real estate investment portfolio to a private financing eCommerce platform. He continues to be a leader in the real estate industry as he uses his analytical expertise to seek new real estate investment opportunities.
As a tech junkie and avid sports enthusiast, when Manzeel’s not working with clients, you can find him reading technology blogs, playing squash or watching tennis with his two boys.
Shared ownership is an innovative way to break into the housing market, especially for those who may not have enough savings for a full down payment. Ourboro offers a unique shared ownership model that helps potential homeowners achieve their dreams without taking on additional debt. In this guide, we’ll explore how Ourboro works, its benefits, and everything you need to know to decide if it’s the right choice for you.
What is Shared Ownership?
Shared ownership allows individuals to co-own a property with an investor, reducing the financial burden of buying a home. This model offers several benefits, such as lower initial costs and shared risks. However, it also comes with challenges, including shared decision-making and potential complications when selling the property.
Benefits of Shared Ownership
- Lower Initial Costs: Reduced down payment requirements make it easier to enter the housing market.
- Shared Risks: Both parties share in the financial risks, reducing the burden on the homeowner.
- Access to Better Properties: Potential to afford higher-value homes that might otherwise be out of reach.
Challenges of Shared Ownership
- Shared Decision-Making: Requires consensus on significant decisions, which can be complex.
- Potential Complications in Selling: Dividing proceeds and handling depreciation can be challenging.
How Ourboro Works
Ourboro’s model is straightforward and user-friendly. Here’s a step-by-step breakdown:
- Lock In a Contribution: Complete an application and work with Ourboro’s team to determine how much they can contribute towards your down payment.
- Co-Buy Your Home: Get connected with a licensed mortgage broker and a top real estate agent to find your new home.
- Grow Together: Ourboro supports you throughout your homeownership journey, sharing in any gains or losses when you sell the property.
Detailed Process
| Step | Description |
|---|---|
| Lock In a Contribution | Submit an application and determine the down payment contribution. |
| Co-Buy Your Home | Partner with a mortgage broker and real estate agent to find and purchase a home. |
| Grow Together | Receive ongoing support and share in the home’s appreciation or depreciation. |
Eligibility Criteria
To qualify for Ourboro’s program, you need to meet specific criteria:
- Geographic Requirements: You must be looking for a home in the Greater Toronto Area or one of Ourboro’s investment regions.
- Financial Prerequisites: You need to qualify for a mortgage and have at least 5% saved for a down payment.
- Other Qualifying Factors: This should be your first home, and you should be using co-ownership as a stepping stone to full ownership.
The Co-Investment Model
Ourboro’s co-investment model involves purchasing a share in the future value of your home. The percentage of the down payment each party contributes translates into their equity stake in the home.
Example Scenario
Let’s say you co-buy a $1,000,000 home. Your mortgage would be $800,000 (80% of the home’s value). If you contribute $80,000 (8% of the home value) and Ourboro contributes $120,000 (12%), together you have a $200,000 (20%) down payment.
| Party | Contribution | Percentage of Down Payment | Equity Stake in Home |
|---|---|---|---|
| You | $80,000 | 40% | 40% |
| Ourboro | $120,000 | 60% | 60% |
Fast forward a few years, and the home sells for $1,500,000. After paying off the mortgage and any closing costs, the remaining proceeds are divided according to the equity split.
Equity Distribution Example
| Item | Amount |
|---|---|
| Selling Price | $1,500,000 |
| Mortgage Balance Paid Off | $700,000 |
| Remaining Proceeds | $800,000 |
| Your Share (40%) | $320,000 |
| Ourboro’s Share (60%) | $480,000 |
Advantages of Using Ourboro
- No Interest or Additional Debt: Ourboro’s contribution is not a loan, so there are no interest payments or extra debt.
- Real Estate Expertise and Support: Ourboro provides exceptional real estate expertise to help you find and maintain a valuable property.
- Shared Risk and Reward: Both parties share in the home’s appreciation or depreciation, aligning their interests.
The Homebuying Journey with Ourboro
Locking In a Contribution
Start by submitting your application. If it’s a good fit, Ourboro will lock in their maximum down payment contribution for 90 days.
Finding and Purchasing a Home
You’ll be paired with a partner real estate agent and have access to Ourboro’s custom-built property search tool to find the perfect home. This tool helps analyze and filter listings, showing you homes that meet your needs and are likely to grow in value over time.
Living in the Home and Maintaining Value
Once you move in, Ourboro offers programs and services to help preserve and increase your home’s value. These services may include:
- Home Maintenance Tips: Regular advice on how to maintain and enhance your property’s value.
- Market Updates: Information on market trends to help you make informed decisions about your investment.
- Community Support: Access to a network of professionals and other homeowners for advice and support.
Selling Your Home
When you’re ready to sell, the process involves:
- Paying Off the Mortgage: The bank is paid back first.
- Equity Distribution: The remaining proceeds are divided according to the equity split.
- Handling Potential Losses: If the home depreciates, both parties share in the loss.
Case Study: Ricardo & Patricia
Ricardo and Patricia co-bought a home valued at $900,000. They contributed $45,000 (5%) and Ourboro contributed $135,000 (15%), making a total down payment of $180,000 (20%). After five years, the home appreciated to $1,200,000.
| Party | Contribution | Percentage of Down Payment | Equity Stake in Home |
|---|---|---|---|
| Ricardo & Patricia | $45,000 | 25% | 25% |
| Ourboro | $135,000 | 75% | 75% |
Upon selling, after paying off the mortgage, the remaining proceeds were $600,000. Ricardo and Patricia received $150,000 (25%), and Ourboro received $450,000 (75%).
Frequently Asked Questions
What happens if the home value decreases?
Both parties share in the loss, aligning their interests and ensuring that both parties are equally invested in the property’s success.
Can I buy out Ourboro’s share?
Yes, you can buy out Ourboro’s share under specific conditions. This can be a great option if your financial situation improves and you want full ownership of the property.
What are the closing costs?
Closing costs are the responsibility of the co-owner, but Ourboro may offer a selling bonus to help cover these expenses. This ensures that you are not burdened by unexpected costs when selling your home.
How does Ourboro’s support benefit me?
Ourboro’s real estate expertise and ongoing support help you make informed decisions, maintain your property’s value, and navigate the complexities of homeownership.
Testimonials and Success Stories
Kyle & Marina: “We felt like we were with friends and family looking after us and supporting us. It was the perfect fit.”
Marsha & Gary: “We would like to say a big thank you for making our dream of owning our 1st home in Canada a reality. Always very accommodating and supportive with great advice and service.”
Tom & Sarah: “Ourboro made the process of buying our first home so much easier. Their support and expertise were invaluable.”
Conclusion
Ourboro offers a new way to buy and own your home through a shared ownership model that aligns the interests of both the homeowner and the investor. With no additional debt and expert support, Ourboro makes homeownership more accessible. If you’re looking to break into the housing market, consider Ourboro as your co-investor and partner on this exciting journey.
By leveraging the shared ownership model, you can achieve your dream of homeownership sooner, with the added benefit of professional support and shared financial risk. Whether you’re a first-time buyer or looking to re-enter the market, Ourboro provides a viable and innovative solution.
For more information and to get started on your journey to homeownership, visit Ourboro’s website and submit your application today. Your dream home is just a few steps away!
Note: This article is intended for informational purposes only and does not constitute financial advice. Please consult a financial advisor or mortgage professional before making decisions about your mortgage.
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