# Moving Provinces - house for son



## InvestingPerson (Feb 11, 2014)

My parents are planning on moving to Ontario from Saskatchewan.
They want to buy a house for my brother who has a new family. They would rent out the house to my brother.
My parents are retired and have enough money to buy the house outright, but that would require cashing in RRSPs, other investments.
Instead they think it makes sense to get a mortgage from one of the big 5 and buy the house in Ontario, and then when they do move themselves they will sell the house in Saskatchewan and use that to pay off the mortgage/buy a condo in Ontario.

1) Does it make sense for my parents to get a mortgage for the house in Ontario? or does it make more sense to cash in the investments and buy it outright?
2) Is it better for them to instead give the down payment money to my brother and have him buy the house (from an inter-provincial fee perspective, lawyers, etc. I don't know what's all involved)
3) Mortgage brokers are each regulated by the province, but are there interprovincial brokers? Is there a bank anyone would recommend for interprovincial mortgages?

Cheers,
IP


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## InvestingPerson (Feb 11, 2014)

Sorry I forgot to point out if it wasn't clear that my brother lives in Ontario and they're thinking of buy a house for him in Ontario.


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## Just a Guy (Mar 27, 2012)

Why not have them help with the downpayment and co sign on the mortgage. That way your brother would be responsible for paying the mortgage. If he ran into trouble, your parents could make the payments if necessary...but I'd hope your brother wouldn't ruin his parent's credit rating.

If your brother wants a house, he should be willing to pay for it.


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## LBCfan (Jan 13, 2011)

Better yet, if they can afford it. Just give your brother a down payment and subtract it from anything he might inherit. If your brother screws up, they haven't lost anything but the gifted amount. All other scenarios leave them liable to future events.

If they really want to buy a house and rent it to your brother, the mortgage should be on the house they bought to rent (probably/possibly) making the interest tax deductible.

I gave my kids down-payments. After that, they're on their own.


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## InvestingPerson (Feb 11, 2014)

Thanks LBCFan, good points. I read up on some G&M articles about this and recommended the down payment route.


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## AlMansur (Jan 25, 2016)

With the recent property prices going up in double digits, it's good time to buy now.
The bank of Mum/dad is being relied on more and more. the son should buy on his own name, take advantage of any discounts/credits as a first time home buyer. Parents can pay the down payment. With 20% down, no need to pay CHMC.


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