Bank of mom, dad vital for millennial first-time buyers
Young Canadians are increasingly receiving help from their parents in order to become first-time buyers in Vancouver and Toronto.
A study by lender HomEquity Bank shows that parents are keen to find out about reverse mortgages to release equity in order to give their kids a downpayment.
"Ten years ago, this topic rarely came up as most seniors were more concerned with remaining self-sufficient. And, first-time homebuyers were purchasing houses on their own. That's changed. Up to 30 per cent of my clients aged 60+ now want to discuss to what degree they can help their adult children financially," explains Rona Birenbaum, financial planner and founder, Caring for Clients.
HomEquity says that by using a zero-rate mortgage registered in the home, the parents’ funds are protected and they can later choose to cancel the mortgage with the funds considered as a gift.
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