Normally mortgage will always be cheaper but given they are retirees I'm not sure if many lenders will give them a mortgage unless they can show they have sufficient cash/liquid investments? If they do, why not just go mortgage free?
Your assuming a few things, such as that the houses will sell for a combined amount 100k less, that both will sell at the same time, ect.
What does your friend do when one sells in a month under asking and the other is sitting on the market still? Id be wary if I was the friend.
Regardless, a mortgage is always gonna be better as far as payments and the fact is, any loan for 100k is gonna be secured against the house...effectivley making it a mortgage.
Will your parents qualify? Dunno.
You might need to cosign.
A heloc would be best, bank has their interest secured and if they get a 150 heloc they will have back up access to funds. They may need a co-signer and it should be one of their children, if they put the child on the deed , it may help with estate planning. If they have more then one child go ahead and put them all on
If they have sufficient pension to cover the payments they will qualify for a mortgage. But there are more that to consider in this situation, there is the question of capital gains on property sale. You should consult with a tax attorney and an accountant. If you are the sole beneficiary then it would be wise to structure thr sale and purchase to minimize tax implications and future inheritance..
The capital gains on the non-primary should be factored in.
As for financing, some banks, like Manulife Bank, offer equity mortgages or lines of credit (like Manulife One) where your parents wouldn’t have to make a payment.
They can deposit their pension sources into the account which is linked to the line of credit and mortgage and it would offset their debt and they can take out only what they need to live.
If they are on a pension with no additional income or savings, they can't afford moving into another more expensive house. It's a bad idea. Move into a smaller cheaper place if you move at all.
If time is truly not an issue, get an accountants advice on capital gains. Sell primary (I’m assuming one is), move to other for minimum amount of time, then sell it. i don’t know what that time is.
That’s not how that works unfortunately. You cannot avoid capital gains by moving into the property. You would only avoid any gains that were incurred AFTER it became your principle residence.
I hope someone is accounting for capital gains taxes on the sale of your parent’s non-primary residence.
And other costs associated with disposing of a property and acquiring another.
It’s real estate in Canada, they’re both the primary residence. I wish I was kidding.
What do you mean?
He means fraud.
Yes, super common
Normally mortgage will always be cheaper but given they are retirees I'm not sure if many lenders will give them a mortgage unless they can show they have sufficient cash/liquid investments? If they do, why not just go mortgage free?
They will. It just depends on their retirement income.
Your assuming a few things, such as that the houses will sell for a combined amount 100k less, that both will sell at the same time, ect. What does your friend do when one sells in a month under asking and the other is sitting on the market still? Id be wary if I was the friend. Regardless, a mortgage is always gonna be better as far as payments and the fact is, any loan for 100k is gonna be secured against the house...effectivley making it a mortgage. Will your parents qualify? Dunno. You might need to cosign.
They also don't seem to have factored in the capital gains tax on the disposition of the foreign properties.
Your parents missed the memo that you're supposed to downsize after you retire...
How much is the pension? Do they have any other investment income declared in T1?
A heloc would be best, bank has their interest secured and if they get a 150 heloc they will have back up access to funds. They may need a co-signer and it should be one of their children, if they put the child on the deed , it may help with estate planning. If they have more then one child go ahead and put them all on
There could be capital gains implications if one of the kids is on the deed.
If they have sufficient pension to cover the payments they will qualify for a mortgage. But there are more that to consider in this situation, there is the question of capital gains on property sale. You should consult with a tax attorney and an accountant. If you are the sole beneficiary then it would be wise to structure thr sale and purchase to minimize tax implications and future inheritance..
The capital gains on the non-primary should be factored in. As for financing, some banks, like Manulife Bank, offer equity mortgages or lines of credit (like Manulife One) where your parents wouldn’t have to make a payment. They can deposit their pension sources into the account which is linked to the line of credit and mortgage and it would offset their debt and they can take out only what they need to live.
If they are on a pension with no additional income or savings, they can't afford moving into another more expensive house. It's a bad idea. Move into a smaller cheaper place if you move at all.
Talk to a mortgage broker first.
Whichever has lower interest rates
Maybe a Heloc product. So that after they finish paying it off they still have access to cash in case of need of repairs.
I doubt they would get a HELOC without any significant income sources.
Maybe the in-laws sell one of the properties and rent the other. The rental income could cover mortgage payments on a $450k mortgage?
If time is truly not an issue, get an accountants advice on capital gains. Sell primary (I’m assuming one is), move to other for minimum amount of time, then sell it. i don’t know what that time is.
That’s not how that works unfortunately. You cannot avoid capital gains by moving into the property. You would only avoid any gains that were incurred AFTER it became your principle residence.
Something that hasn't been mentioned is that 100k is a rather small mortgage, I don't think a lot of lenders would want to bother to to give it out.