Mortgagenomics Canada

Today I want to talk about how one could incorporate gifted equity when purchasing a home (with the proceeds of a mortgage) from a direct family member. So, in other words a transaction between two direct family members (mainly child and parent) can occur by the selling family member simultaneously gifting a portion of their equity to the buying family member while formally selling/transferring the property to them. The gifted equity portion is used to fulfill the minimum down payment requirement of the buyers mortgage. Here's how it works:STEP 1: The Buyer must qualify for the mortgage as per standard qualification criteria with the exception of the unique source of the down payment being gifted equity (rather than from own sources).STEP 2: Determine the amount of the Gifted Equity. Depending on the amount of gifted equity, the mortgage will be either high ratio, or conventional. If the down payment (gifted equity) is less than 20%, the mortgage is classified as high ratio and w