Personal Finance

Mortgage downpayment question

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  • Nov 11th, 2013 8:09 am
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[OP]
Member
Dec 19, 2010
494 posts
97 upvotes

Mortgage downpayment question

I have a joint bank account with my folks where the proceeds from the sale of their home will be deposited. Two months later, I will be purchasing a home where I'd like to use the deposited funds + some of my own savings as a downpayment to purchase a new property (there will be a small mortgage). Is this considered okay? i.e. Will the bank be okay pre-approving me for a mortgage based on funds in a joint bank account? Is this an issue as far as the CRA is concerned - e.g. is use of funds from the sale of my parent's home considered a taxable gift to me of some kind?

Separately- is it possible to have the mortgage in my name but the title/ownership of the home in my parent's name?

Thanks.
2 replies
Sr. Member
Mar 18, 2012
562 posts
112 upvotes
In my experience where the money comes from does not seem to bother the mortgage providers. Gifts from family are common.
Is the home they are selling their primary residence? If so then the proceeds of the home are not taxable however if this was a rental, vacation or income property capital gains will have to be paid.
For this exact reason if you will be the one living in the home it is better it be in your name as when you sell it you won't incure a tax bill.
[OP]
Member
Dec 19, 2010
494 posts
97 upvotes
The proceeds are from the sale of their primary residence, so no capital taxes there. The funds will be given to me as my understanding was that there is no tax on gifts of cash. You do make a good point about the future sale of the new home, it makes sense to have it in my name to ensure it is treated as my primary residence (which it will be) when it is sold. Thanks for the reply.

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