A recent study by the Canadian Association of Accredited Mortgage Professionals showed that the average first-time home buyer has a 21 percent down payment, with 13 percent of that money coming from family members. In most cases, and sometimes because of this gift, first-time buyers are able to purchase a home on their own, meaning their names are the only ones that appear on the home’s title (so they have full legal rights to the property, regardless of where down payment funds came from).
Occasionally, first-time buyers do not qualify for a mortgage on their own, even with a sufficient down payment and the ability to cover costs. Reasons a lender may turn down a first-time buyer include insufficient job security (i.e. young entrepreneurs, someone starting a new job), bad credit or high debt. In this case, a parent or family member may be included on the title of the property and is legally part owner. This means that if the principle buyer defaults on mortgage payments, the person that is also included on title is fully responsible to keep payments up to date.
Fast forward a year or two, and the young buyers may find themselves in a better position, able to secure financing on their own and eager to transfer title solely to themselves. It isn’t a complicated process but because there are legal documents necessary, there will be lawyer’s fees involved.
In Ontario, your real estate lawyer will require a completed Title Transfer Intake Form, a document proving ownership of the property, a recent property tax bill and confirmation from your bank that the transfer is approved. Your lawyer will draw up the legal documents and prepare necessary paperwork for both parties to sign. The cost varies from lawyer to lawyer but you can expect to pay between $500-$700 (this includes a government registration fee of $75.)