Down Payment “Gifts” And How They Work
We are in a time where its getting more and more expensive for first time buyers to get into the market. It can be done if you get a little help from the bank of mom and dad. Believe us, we have an RRSP set aside that we’ll probably one day use to help our boys with their down payments. That being said, we get asked all the time how it works. A “gifted” down payment or part there of, has to come from a parent. It can’t come from someone other than blood just to close a deal. We have come across a few cases where son or daughter might have half of 20% down they may need to avoid CMHC premiums and the other half comes from their parents. All that is required for documentation is a signed Gift Letter from the parents, which simply states that the money does not have to be re-paid, and a picture or evidence of the son or daughter’s bank account showing that the gifted funds have actually been transferred.
We suggest you talk to your bank or a great mortage broker about how it works but you’ll find that most banks are ok with “gifts” for down payments. As always, any questions about the market or real estate in general, never hesitate to reach out to us. ~Michael & Lisa