Lacking a Down Payment?

Saving up an adequate down payment is among the largest obstacles for first-time homebuyers – and more difficult now than ever before because of rising home prices – which means your family could benefit from help now instead of waiting for an inheritance.

An increasing amount of Canadians over 55 are gifting their children money for a down payment on their first home. In fact, according to a report from CIBC, 30% of Canadians received financial help from their families to purchase a home in 2020. This is significantly higher than the 7% of Canadians in 2000.

One benefit to providing your children with the funds to purchase their first home is that an early inheritance avoids probate fees (estate administration tax). Gifting income-generating investments can also save you money by bringing you down to a lower tax bracket. Find out more from your tax specialist.

How can you help your family with a down payment now?

Many people use a home equity line of credit in order to gift an early inheritance. Others liquidate or transfer investments. However, these methods can lead to a loss of earnings or taxes payable when selling investments.

A reverse mortgage, on the other hand, allows you to cash in your home’s equity, without any of these disadvantages.

Advantages of reverse mortgages

• Your investments remain intact

• You have no regular monthly payments/fees

• Your income is not affected

• The money you get from a reverse mortgage is tax-free

Contact me to find out more about gifting a down payment to your family and how you can enjoy your home equity together.

Victoria Fair, Mortgage Agent

M21000706

victoria@dreamlanemortgages.com

226-343-0599