Hello all,
Sorry my first post is a request for help and not an informed opinion to assist others, but I am running into a few problems.
Currently, my wife and I are riding the Alberta wave and have done fairly well, and now we`d like to assist some people in accomplishing some of their goals such as extra income in one case and a first home purchase for another. Currently, my aunt is living in one of my houses. I have been talking with her about where she sees herself in the future as she has been talking about 55+ complexes, except that she doesn`t know how she`d afford it and besides, she says that is a long time off. However, my wife and I are expecting a baby and looking to sell the house she is in, in the spring to cover some of the costs we have coming.
Anyway, my aunt decided that maybe she should buy the house. It hadn`t occured to me, and my wife suggested maybe the hassle-free tenant strategy might work, something my aunt was very interested in since she has no downpayment, but knows Edmonton real estate has a ways to go. So we figured, we`d leave enough money in the house to satisfy the loan to value ratio the lenders want, and my aunt could get a mortgage to pay out the existing one and provide us with some extra money to buy the stuff we need for our new addition. My aunt would own 50% of the house and my wife and myself would each get 25%. My aunt becomes a homeowner, and we get to ease some financial stress.
But that is as far as we can get.
Turns out, she can`t get a mortgage in her name only and have us remain on title, on top of this lending institutions all want us to write gift letters to my aunt for the downpayment amount!?!? Another suggestion was that we just go ahead and gift the portion of the house to her and then 2 months down the road add ourselves back on title...some problems with that include her son, who has numerous fraud convictions and who in the event of his mother coming into money might go after it so losing control like that is a little dangerous, as well to do so would trigger a 100% capital gain, despite the fact we would not be recieving that much from proceeds and might not be able to pay the tax bill and have anything left over since much of the amount would be gifted.
It seems like such a good idea but the mechanism sure isn`t working. Any concrete suggestions would be helpful, also an opportunity to talk to someone who has managed to create a situation where one brought in money and another the mortgage and both were on title would be great.
Thanks,
Ian
Ian, I edited this to read easier.
Sorry my first post is a request for help and not an informed opinion to assist others, but I am running into a few problems.
Currently, my wife and I are riding the Alberta wave and have done fairly well, and now we`d like to assist some people in accomplishing some of their goals such as extra income in one case and a first home purchase for another. Currently, my aunt is living in one of my houses. I have been talking with her about where she sees herself in the future as she has been talking about 55+ complexes, except that she doesn`t know how she`d afford it and besides, she says that is a long time off. However, my wife and I are expecting a baby and looking to sell the house she is in, in the spring to cover some of the costs we have coming.
Anyway, my aunt decided that maybe she should buy the house. It hadn`t occured to me, and my wife suggested maybe the hassle-free tenant strategy might work, something my aunt was very interested in since she has no downpayment, but knows Edmonton real estate has a ways to go. So we figured, we`d leave enough money in the house to satisfy the loan to value ratio the lenders want, and my aunt could get a mortgage to pay out the existing one and provide us with some extra money to buy the stuff we need for our new addition. My aunt would own 50% of the house and my wife and myself would each get 25%. My aunt becomes a homeowner, and we get to ease some financial stress.
But that is as far as we can get.
Turns out, she can`t get a mortgage in her name only and have us remain on title, on top of this lending institutions all want us to write gift letters to my aunt for the downpayment amount!?!? Another suggestion was that we just go ahead and gift the portion of the house to her and then 2 months down the road add ourselves back on title...some problems with that include her son, who has numerous fraud convictions and who in the event of his mother coming into money might go after it so losing control like that is a little dangerous, as well to do so would trigger a 100% capital gain, despite the fact we would not be recieving that much from proceeds and might not be able to pay the tax bill and have anything left over since much of the amount would be gifted.
It seems like such a good idea but the mechanism sure isn`t working. Any concrete suggestions would be helpful, also an opportunity to talk to someone who has managed to create a situation where one brought in money and another the mortgage and both were on title would be great.
Thanks,
Ian
Ian, I edited this to read easier.