{"id":1534,"date":"2020-02-06T18:50:33","date_gmt":"2020-02-06T18:50:33","guid":{"rendered":"https:\/\/areslaw.ca\/parry-sound\/?p=1534"},"modified":"2020-02-06T18:50:45","modified_gmt":"2020-02-06T18:50:45","slug":"can-you-help-your-child-put-a-down-payment-on-a-house","status":"publish","type":"post","link":"https:\/\/areslaw.ca\/parry-sound\/can-you-help-your-child-put-a-down-payment-on-a-house\/","title":{"rendered":"Can you help your child put a down payment on a house?"},"content":{"rendered":"\n<p>As parents, the first instinct is to help\nyour child when they need something. Now, it\u2019s time for them to leave the nest.\nHowever, there is a growing issue. In Canada, it\u2019s becoming more and more\ndifficult for millennials to buy a house. At this point, it is almost\nimpossible for younger generations to buy a house. As of recent statistics,\nonly <a href=\"https:\/\/www.osc.gov.on.ca\/documents\/en\/Investors\/inv_research_20171127_missing-out-report.PDF\">33%\nof millennials are home owners and roughly 56% of millennials have buying a\nhome as their top priority.<\/a><\/p>\n\n\n\n<p>Parents financially helping their child buy\na house is a quickly rising occurrence now. In 2019, 37% of homebuyers in\nCanada received a gift or loan from a family member or friend \u2013 which is a\nrather large increase from 2015 at 31%. There are many factors and risks to\nconsider though when assisting your child with a down payment. Parental\ninstincts aside, your finances are important and there can be risks involved\nwith helping your kids with such a large decision. Take the following into\nconsideration first:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>Can you afford to help your\nkid?<\/li><li>Think about your financial\nfuture first \u2013 there can be a lot at stake here depending on which route you\ntake. Do not jeopardize your own finances for your children. Your money is\nyours first.<\/li><li>Can your child keep up their\nend of the bargain? Are you positive that if you choose to lend your child money,\nthey would be OK with paying it back on time?<\/li><\/ol>\n\n\n\n<p>Once you\u2019ve carefully reviewed what\u2019s at\nstake and that you\u2019re financially capable of helping your child out, there are\na few different ways you can help your child with the down payment. <\/p>\n\n\n\n<p><strong>Gifting\nMoney<\/strong><\/p>\n\n\n\n<p>Gifting money is when you give someone a lump\nsum of money without the intention that money being paid back \u2013 no strings\nattached. Fairly simple, right? Well, there\u2019s a little more than just handing\nover the money. When gifting money, there is usually an official declaration\nthat would need to be signed, confirming that the money given is not intended\nto be paid back. When you gift money as well, it isn\u2019t taxed in Canada. <\/p>\n\n\n\n<p>Another way of gifting money is also seeing\nit as a \u201cliving inheritance\u201d. The perk of doing this is instead of money that\nyou intended on being passed down as part of your will, you can instead gift to\nyour child, so they can use that money when they are young to help put a down\npayment on their house. Before moving forward with a living inheritance, it\u2019s\nimportant to evaluate any legal repercussions or how it may affect your will. <\/p>\n\n\n\n<p><strong>Loaning\nMoney<\/strong><\/p>\n\n\n\n<p>If you can\u2019t or would rather not gift your child\nmoney, loans also make a great option. That way, you\u2019ll be getting the money\nback and your child will (most likely) pay less of an interest fee paying you\nback rather than what their mortgage rate would be. So, it\u2019s a win-win.\nHowever, it\u2019s extremely important to review your financial expectations with\nyour child. You\u2019ll need to discuss with them how much you\u2019ll be loaning, what\nthe interest rate will be and how and when repayment will take place. <\/p>\n\n\n\n<p>It\u2019s also important to review with a mortgage broker\nor financial advisor on how the loan will affect the down payment. In some\ncases, a loan is not considered a down payment from your child. What this means\nis that your child might possibly pay a surcharge from the Canada Mortgage and\nHousing Corporation \u2013 so if you choose to take this route, review it carefully.\n<\/p>\n\n\n\n<p>The biggest thing to remember is that there is a lot of trust involved with loaning or gifting your child money towards a home. It is a large financial decision that needs to be looked at cautiously and without the impairment of following that loving parental instinct of wanting to help your child in their time of need. With our expert legal advice at Ares Law, we can equip you with all the information you need and help you land on an option that works best for you and your family. We are specialists on wills and estate planning and want your child to find their forever home without breaking your bank. Connect with us today at our Parry Sound office, <a href=\"tel:7057466444\">(705) 746-6444<\/a>. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>As parents, the first instinct is to help your child when they need something. Now, it\u2019s time for them to leave the nest. However, there is a growing issue. In Canada, it\u2019s becoming more and more difficult for millennials to buy a house. At this&hellip;<\/p>\n","protected":false},"author":1,"featured_media":1535,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[27,1],"tags":[64,218,217,36,106,58,33,60,211],"class_list":["post-1534","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-law","category-uncategorized","tag-estate-planning","tag-gifting-money","tag-loaning-money","tag-mortgage","tag-parry-sound","tag-real-estate-law","tag-real-estate-lawyer","tag-wills","tag-wills-and-estate-law"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Can you help you child put a-down payment on a house? - Ares Law<\/title>\n<meta name=\"description\" content=\"Is your child having difficulty buying their first home? 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