Mortgage Down-payment as a Gift?

Helping children with an investment in their lives

Going by available reports it is likely that a young first-time buyer is reliant upon parental help to purchase a home. It could also mean that they and their parents require some sound financial planning and guidance from a qualified mortgage professional regarding the best way to go about it!

Reports show that although many parents consider providing their kids with some initial financial help, there is a significant amount of misunderstanding about the gifting process.  Canada, unlike the USA, does not have any type of taxation related to gifts. For parents, this in effect means that if you are amongst those parents with funds you will not spend in your lifetime; then it’s worth your while considering a financial gift to your children. It could be made at a time when it would be of the greatest advantage to them; starting their lives with a first-home mortgage investment!

Gifting the right way

As with any other type of significant financial transaction, there is a correct method of making this type of gift. As it involves buying a property, then the logical course of action is to get some advice regarding the mortgage process from an established broker in Guelph. This should be regarded as essential, due to the fact that financial institutions are not overly impressed when a large sum of money suddenly makes its appearance in an account.

They require confirmation that it is a legitimate deposit, or down-payment by their account holder, or in the form of a gifted sum. If you are a first-time buyer it could be financial help from a close relative, but there are various other aspects to it that you should be aware of! Before getting the calculator for your mortgage repayments, check the following; if the gift is from a parent or another immediate relative, carry on calculating. However, it is usual for Guelph mortgage lenders not to accept down-payments gifted by family friends or those who can be classified as “non-relatives.”

In any event, a financial gift should be deposited into your account for it to be documented and the amount confirmed exactly. To avoid any potential complications you would be well advised to enlist the help of an independent mortgage broker who will relieve the pressure associated with the legal aspects of this gift, from you as the recipient and those making it!