Gifted Equity Advice (BC)
My wife and I are grateful to be in the lucky position to buy my family’s cottage off of my grandparents. The property was purchased in 2006 for ~$300k with a current fair market value of $975k (our agreed sale price). The property has never been their primary residence, but my wife and I plan to make it ours.
My Grandfather has offered to help us with the downpayment with a gift of $150K (ie. by cheque). However, I’ve suggested we consider gifted equity to minimize his need to liquidate market assets.
This way, my wife and I can contribute our FHSA’s ($90K) totalling to an effective down payment of $240K. TFSA’s and RRSP’s can remain untouched. Our gross house-hold income is ~220k.
I’m expecting to not require mortgage insurance and to have to pay land transfer tax of 18K. My Grandfather is expecting a considerable tax bill based on the property’s appreciation over the last 20 years of ownership.
If you were in my position:
- Would you consider taking the gift as cash? Or is gifted equity the better option?
- Who would you talk to first? A Mortgage Broker, a RE or Tax Lawyer, or an Estate Planner? or Reddit lol.
- Would you seek a longer term mortgage to minimize monthly payment? Or seek the maximum monthly payment a mortgage calculator says we can afford, so as to maximize the portion of principal paid as compared to interest?
Thanks for reading and we appreciate the advice.