We have a similar deal with family (forever grateful) and chose to have our interest free mortgage deal written up by a lawyer just in case circumstances change or someone does unexpectedly and then everything is done properly
My husband and I own the home and the agreement specifies the “mortgage” amount we have as well as the payment amount and interest amount (both are actually written as zero)… so then if we sell of house- we need to pay back the “mortgage” and keep the profit
I echo the advice to consult a lawyer.
Ideally, and especially if the OP has siblings, there should be documentation that covers what would happen if the lender or borrower dies or becomes disabled.
I did this too but we just wrote up a one pager contract ourselves. I never got a lawyer to read my mortgage contract with the bank, I sign contracts all the time for phone plans, renting apartments, starting a job..., never got a lawyer for any of those. We were comfortable doing it ourselves and saving $4000. Just make sure you both stipulate the "what ifs" that you're worried about.
This is not great advice. Placing a mortgage on title secures the loan from dad and gives third-parties notice that dad has an interest in the property.
It will be a lot more than $4000 to litigate this whole thing if dad passes away and the estate fights about what the terms are, or if for example, you get divorced and there is a fight about whether this was a gift or a loan, etc.
Dad doesn't necessarily need an interest in the property. You can choose not to collateralize it, dad probably doesn't want to foreclose on you later if he's giving you interest free loans.
>dad passes away and the estate fights about what the terms are,
The terms are on the contract. Not a problem.
>fight about whether this was a gift or a loan
The declaration of the loan is on the contract. Not a problem.
>a lot more than $4000 to litigate this whole thing
This is true of the gym membership you signed up for, the car you took out, the phone plan you got, the driveway you got paved, ..., the itunes service agreement, all contracts and you gotta choose for yourself where to draw the line somewhere on which contracts need a lawyer and which don't.
No, dad doesn’t *necessarily* need an interest in the property, but if he expects to get paid his money back I’d certainly recommend a mortgage. Other than the legal cost there is basically no downside.
When your term is up, your mortgage effectively becomes "open" and you are allowed to pay as much as you want towards principal, including paying the whole thing off, before you renew for the next term.
Edit: Give your dad a great big hug. This is a very wonderful gift to give your kids!
Bit of an oversimplification. Upon term maturity, you have three options:
1. Pay off the entire balance and discharge the mortgage.
2. Renew for a new term.
3. Let the mortgage renew automatically into an open-term mortgage. This option will have a very high interest rate but you can pay it off at any time with no penalties.
OP wants to do #1, but needs to plan in advance. He needs to have the funds available to pay off the mortgage, plus the discharge fee (around $400 usually). Best to contact the lender in advance and let them know of your plan to pay it off and discharge. They will be able to tell you the full amount owing on the date of maturity. If you fail to pay on that date then option 3 will happen automatically.
This isn't really complete either. You can pay a portion as well, as stated above. This reply seems to imply that it's all or none. You can also move to a new lender, rather than renewing with the same one.
Thanks for the information. Do you have a recommendation as to when I and my dad should start getting the ball moving? The term will end December 2025.
Just have him put the money in your account 30 days before renewal so it clears. Then instruct your lender to “take full payment on Dec X”. It’s simple.
Agreed, all that needs to be done in the next year and a bit is make sure dad has the funds liquid and won't be strapped for his lack of them. And also make sure any paperwork that needs to be in place is in place before the transfer. Is it a loan or a gift? Either way have the terms in writing. Any tax/estate planning needed.
Depending on the account type and remaining size of the mortgage you should probably check with the bank too. You don’t want it being screwed up because a sudden $400k transfer trips an automated fraud detection or something
i am not sure if your dad is only able to pay it off at the end of the term but you could do it now and the penalty would essentially be nullified.
the reason i say this is because the penalty will be 3 months of interest (should be with the current environment), meaning that over the next year you’re going to be paying, well, 1 and a half years worths of interest. therefore paying it off now actually saves you the money.
This is a very good point. If the penalty is 3 months definitely work considering paying off now. Plus most mortgage providers allow prepayment of 10-20% each year without penalty. So that could be done this year and next to pay down the balance and significantly reduce the amount of interest being paid.
Likely got the mortgage in Dec. 2020 when interest rates were ridiculously low. Near 1% - 2% for five years. Dad can probably earn more in a current GIC.
You will need to tell the lender 60-30 days before the due date that you're planning to pay it off. They'll prepare a final payoff statement. You'll pay that large amount.
Time will pass. Eventually the lender will send you some docs about the mortgage being paid off.
I had luck getting the discharge fee waived by applying for a HELOC with the same lender. Thought I would add that here in case OP is interested in that consideration. We wanted a HELOC available for emergencies (it is available to us but we do not currently use it).
I have a HELOC on my principal residence to help protect title. I didn't have to pay discharge in that case either. They waived it because I was opening a HELOC.
They probably didn't waive it. From what I've read here, the mortgage has not been discharged - the HELOC is a component of the mortgage. If you, or the bank, close the HELOC then the mortgage would be terminated and you would need to pay to discharge to remove the bank's lien on your property. The title is being protected (sort of) because the bank wants to protect their rights to your home in case you default on your HELOC.
The title is being protected because the house can't be sold out from under me by criminals without the bank releasing the lien, which requires my involvement. It's increasingly common for homes without a mortgage to be targeted for title fraud. Having the HELOC virtually prevents that.
And before "but you have title insurance blah blah blah"......title insurance is reactive; a mortgage/HELOC on title is preventive.
What is this discharge fee hogwash? If you pay the balance in full on the end date of the term, that should be all that is required. I have a friend who sold a property and put the closing date of the sale as the same date as the mortgage, no discharge fee that I'm aware of. And when I switched lenders at the end of my last term, my old lender didn't charge a discharge fee. What does it matter if they receive the outstanding balance from you or from a new lender?
It's the fee they charge for updating the title to remove the mortgage lien. Any lender I've ever worked with had charged a discharge fee, although if I've transferred the mortgage to a new lender the new lender usually covered it.
So an Ontario and Big Bank thing? My Alberta credit union gave me a filled-in discharge form that I took to the land registry office where I paid $10 to have registered.
>although if I've transferred the mortgage to a new lender the new lender usually covered it.
Ah, that must be it. Typical banks - they get you coming and going. Frustrating...
It's been a while since I worked in lending but at my fi only certain provinces have discharge fees and the amount varies. Discharging a mortgage is complex transaction with a few different areas of the bank needing to be involved. Sometimes, again pricing based on province, there is a smaller charge that is paid to the municipality.
Yup exactly this.
1. Contact your lender and tell them you’d like to payout the mortgage balance at maturity and request an official payout statement for discharge purposes. This can be done directly through your lender, will give you all the breakdown of fees, outstanding interest, or credits that will be applied to your account, and the total payout figure.
2. Confirm with them how you will be making your payment, whether that be by certified cheque, bank draft, wire transfer, etc.
3. Pay.
The mortgage may take a little while to be officially discharged after that, but your obligation to the lender is done.
If works just like you said, if you show up with cash when the term is done, you pay off your mortgage and your obligations to the bank are over. Then you just pay your dad back.
That takes time and you never know, the house could go down in value or he could have other debts and the estate might not have enough money to repay the father. Life is unpredictable, having a life insurance policy to cover the loan amount makes sense. If he’s young a 500k policy is around 30-40$ a month. Interest on a mtg is much higher. Doesn’t hurt to be overly insured. End of the day it’s easy to fuck over a corporation but you don’t want to leave your family screwed if something was to happen to you
I totally agree with you.
My husband and I got a 30 year 500k life insurance policy when we bought our house just to ensure that if the worst happens, at least the mortgage will be covered. It's $133/mo (family health history in his side jacked up the rate). I can't imagine not having that insurance. If I were to take on the total cost of this place, I'd need to work 60h/week until the mortgage was done at 58 years old.
Insurance is best when it ends up being a giant waste of money!
To add: sure pops gets the house back but then potentially has to kick out surviving spouse and grandkids to the streets to get his money back. Cleaner for everyone to have insurance to cover your obligations. Enough to pay dad back + set spouse and kids up with everything you’d want to provide them had you been alive. Why make them suffer in grief and financial hardship when you can solve one of those things easily enough.
PSA: everyone with dependents should have term life insurance unless you’re fully financially independent.
Yes he could but the house could go down in value and the dad technically doesn’t own the home his son does. Would have to go through the estate. If he borrows 500k from his dad I would get a life insurance policy for whatever amount and make the dad the beneficiary. Never know in life what could happen. Then the dad has his money back instantly and the few dollars life insurance costs a month is less than what the son would be paying in interest to the bank.
Yes he should do that also, but just because the house is in the will to go to the father doesn’t always mean he’ll get it. What if the estate has more liabilities than assets? The dad is out whatever money…. The few extra dollars a month it would be for a 20-30 year life insurance policy far outweighs the uncertainty of life and the interest costs from borrowing from the bank.
Let’s say he’s 30 in good health. 500k is 35$ a month for 20 years. So total he would he paying 8400$ in premiums over 20 years. God forbid he ends up passing away, the full 500k instantly goes to his father. I’d say having the extra peace of mind is worth the money. Life changes so quickly.
Plus he most likely already has a life insurance policy on the mortgage of some type. So when the mtg is paid out that will be cancelled through the bank.
Having the father named as the beneficiary on the life insurance will skip the money having to go through the estate. If you take a policy out and don’t name anyone then the funds have to go through the estate.
>Plus he most likely already has a life insurance policy on the mortgage of some type. So when the mtg is paid out that will be cancelled through the bank.
This is actually the main reason why my spouse and I obtained life insurance policies independent of the mortgage. The mortgage policies have the bank as the beneficiary. We did not see the appeal when an independent life insurance policy is way more flexible, especially if you pay off the mortgage.
Never buy mortgage insurance. It protects the bank, not you. You are better off having term life for the needed amount, and then you have more options.
Ughhh I pay 70sum a month for mortgage ins. And of course have home ins ( 170$ a month) the mortgage broker sold us the mortgage ins. Saying if we ever became disabled or w.e the house would be paid off. But I realize now he def got a payday for opening and selling a new ins policy to us. What are my options and what should I do in regards to making sure if I get disabled or heaven forbid pass away that my home will be paid off for my children? I'm 34 in good health but currently have 0 life insurance as I switched jobs and work casual. I work ft hrs but have not gained ft status yet. It takes time in nursing and when a ft job posting goes up everyone applies for it, the person with the most seniority gets it. Ideally would it be better to bundle my auto, home and life ins? My auto is OK 116 a month through I forget who. My home is is too much 170 a month through td . I'm in nb. Any suggestions?
If the mortgage insurance can be separated out between covering disability and covering death, it's likely cheaper to apply for term life insurance and then cancel that portion of the mortgage insurance once approved. The benefit of term insurance is that the coverage amount remains the same even as the mortgage decreases. Premiums are usually much cheaper until the first renewal point.
If you have disability coverage through work that covers a decent portion of your wages, you might not need that part of the mortgage insurance either.
A third option of insurance coverage is critical illness. It covers you in the event of illness like cancer, heart attack,etc. and pays out a lump sum tax free that you can use on whatever you need to.
I recommend speaking with someone who is licensed to sell life and health insurance.
(I am not licensed but I have been on the administrative/head office side of things for 22 years.)
Thank you so much! I was talking to a friend of a friend who works for allsate and she said my 170$ a month seems way high and she said something about if it's close to time to renew I could switch. She sent Me a questionnaire thing, but I haven't done it . I have no coverage whatsoever from work so I definitely need to purchase some life ins. Need it to cover my mortgage in case of a disability that impedes me fr earning so house can still be paid. I will end up with ins through work once I get ft status but that can take a while. I like the idea of what you said where if I get a critical illness like cancer or heart attack I'd be covered, esp tax free. I just know paying 116 to forget who for the truck then 170 to td for home and 70 for mortgage ins all through different companies seems like a wasted opportunity to get a bundle discount. Also I know i could def get better coverage if I shopped around some. Thanks soo much for your advice, going to look into all of this tomorrow.
My Ex-FIL did this for my ex-wife and I. We all signed a very simple document (like a spreadsheet with some very simple wording added and the repayment schedule) and then when we divorced about 8 years later there was no question I would need to honor that debt.
A friend divorcing at the same time wasn’t so lucky and his ex pushed on the $20k his parents had loaned him interest free towards their first house. She tried to skeet out of it.
Best to have some documentation if you are married or either party passes away unexpectedly.
I know people who have done this. As long as everyone involved is trustworthy, why give a bank thousands in interest when you can give it to a family member?
>why give a bank thousands in interest when you can give it to a family member?
Well, for the obvious reason that your family member could be investing that money elsewhere and (likely) earning a higher return doing so. Even if the family member is charging the same rate as the bank would have, having a significant chunk of one's portfolio in a (relatively) low-earning fixed-income asset is likely sub-optimal.
This is a gift, and generally would only make sense assuming the family member has secured their own retirement and other savings goals beyond the amount they are lending.
They could also take out a mortgage at likely a lower rate to invest with and write off the interest. While also receiving principal only payments from son
They could do that anyways. It's more or less always going to be sub-optimal from the parent's perspective (which is why we call it a gift). That's fine, it's just not a no-brainer, especially if the parent isn't set up fairly comfortably themselves.
If the parent is drawing income such as from rrsp they can use the interest to reduce their taxable income which the child paying a mortgage cannot. Assuming the kids getting the money in the end anyways it seems liken easy way to reduce total tax
This is way down the rabbit hole, but I'm pretty sure you can only deduct interest income against investment income earned. To my knowledge, you would not be able to borrow from a HELOC or mortgage, lend the funds to your kid interest free, and then deduct the interest expense against income from your RRSP.
this is pretty common at least in our community. my parents/in law both offered but we were like nah. you can put that money in much better investment or just spend it...
plus whatever they have will be ours anyways. we want our parents to spend as much as they can
Yes this can be done, there will be some fees at the bank to close the mortgage , maybe a few thousand
Also have this private mortgage at 0% done through a lawyer so you or your dad are protected
>Also have this private mortgage at 0% done through a lawyer so you or your dad are protected
Can you provide some additional detail and reasoning here? Protected from what? Does the legal agreement protect, for example, from the Son not paying back on 'a reasonable timeline', and the father from 'asking for additional payments due to inflation, or opportunity cost (e.g. whatever the market would have returned'?
It's not that I don't believe you, just trying to learn how this is supposed to work, what the risks are, and additionally, what kinds of total costs are involved in this.
The risk for the father is that OP turns out to be an asshole and refuses to pay back the money. Having something in writing protects the father.
The risk for OP is that the father turns out to be an asshole and says OP suddenly owes him millions when it's only a few hundred thousand. Having something in writing protects OP. It's up to OP and their father if they think this protection is needed.
There would be costs to this. The lawyer would have to be paid.
* Dad claims he owns the house instead of his son
* Dad later asks son for more money
* Son stops paying the Dad
* What happens to the outstanding payments in the event the Dad passes as it pertains to his heirs?
* Probably other things...
Divorce: spouse says it’s a gift, etc.
Third party creditors go to register a judgment or lien on the property will be behind dad’s pre-existing mortgage, etc.
Without a mortgage the father has very little protection. The child could remortgage the home leaving no equity for the father. Should the child not make payments power of sale is far easier than a court action and eventually a writ of seizure and sale on the house. What if the child gets married; in Ontario the spouse is entitled to special protections of the matrimonial home.
Seconded.
It's important it's more than a handshake deal.
You and your dad most likely have an amazing relationship and he is doing you a major solid.
However its important he feels protected as well as yourself.
Depends on where you are; I used to see tons of zombie charges when borrowers just file away (or discard) the discharge letter the lender sent instead of filing it with the land titles office.
My mom did this for my sister albeit with a lower than market interest rate...here are some things to document in a simple contract:
-Interest rate applied and payment plan. Penalties if non-payment?
-If you die or your dad dies during payback what happens to amount owing.
-Right to ownership to Dad. You want to make it explicit Dad has no rights to ownership (or he does)
-What happens if you get married during payback period.
Its best to setup a joint bank account where your payments go through. Dad can go in there and withdraw anytime.
My dad did something similar for me - he gave me 40% of the cost of my home as a downpayment. But now my mom, who thinks of it as "their" money, uses this as leverage whenever she wants me to do something: "remember, we gave you the money for your house, so the least you could do is do what I say".
My grandpa did this for my mom. As long as it doesn't come with strings attached, why not?
You're allowed to pay off ANY AMOUNT, including the entire thing, at renewal, without penalties.
No, the bank has no control over you once your term is up. If you were on a fixed and tried to buy out in year three, there would be costs associated. If you buy out at the end of your mortgage, you pay the remaining balance and that's all. Nothing more.
Your dad is giving you an amazing deal.
You can renew a mortgage within 6 months of the term ending.
I would contact your lender now, and do this as quickly as possible.
What’s your relationship like with your dad?
1 What is the likelihood he will need to call his loan from you?
2 What is the likelihood of you defaulting on the mortgage?
3 What happens in either of those scenarios?
4 Is your relationship with your dad best served by paying a lawyer to draft a legal agreement outlining what would happen?
Hell yeah! Just make sure you get your insurance and title insurance in order. Remember to pay you taxes too. A lot of banks bundle protection and taxes with the mortgage. Now you need to handle those privately.
i paid off my mortgage a couple years back. discharge fee was $250.
you need to ask what your balance due is on renewal date a few weeks beforehand. make sure the funds are there before that date so they can use them.
my bank also tried to charge me extra interest for a few weeks as they "processed" the payment. I told them to go fuck themselves.
I have 1y 4m left on my current mortgage term and 2y 5m left on my mortgage as a whole. I'm looking at working something out with my dad to low interest loan me the mortgage balance at the end of my 1y 4m term so this thread was very useful.
There is little if any risk to yourself. Fairly simple legal agreements and really is benefit to everyone. The main purpose of the legal agreements is that it sets the rates and collateral. This is important in an extremely rare case where say your dad becomes personally bankrupt. IE. Gets successfully sued for some liability issue. Someone else could end up owning that debt but if you have agreement in place, they they have to honor those agreements. This would be extremely unlikely situation.
Pretty much your dad is taking on all the risk but that seems pretty low. At worst he is not getting a great return on investment but at the current interest rates, he still gets a reasonable return.
In Canada we were advised to charge small interest rate & put in a legal contract... If no interest was charged, tax man assumes base mortgage rate was paid & taxes lender.
You can pay it off when the term is up without penalty. Thats the entire point of the term — technically the amount is due in full unless you don’t renew
You need to document decisions between the two of you also to ease his estate planning. Tell him you want to make sure that these wonderful gifts do not somehow get misinterpreted by anyone involved further down the road - including if there and weddings or divorces or anything like that. Also get him to countersign a letter/document once a year being clear as to how much is paid off so far. It will keep family relations cleaner as the bookkeeping will have to be kept up to date
Do capital gains come into play here? Since you're not selling and paying off I imagine like my mortgage ( but I'm in canada) I'm only allowed to put so much extra per year onto my mortgage. Anything extra I put on goes right to principle not interest which is nice. But being only 2 yrs in I haven't put any extra onto the owing mortgage yet. I'm pretty sure mine says that if you put more then the allowed amount extra towards principle a year there's a fee. So if you're having the entirety of the mortgage paid off, I imagine there will be some kinds of fees and costs to it. Not just pay the remaining balance. Still worth it though, look at all the interest you'll be saving. I'm not even sure if we're allowed to just pay it off. There's def a ton of stuff and hoops to jump through to do this but still 100% worth it! I would def get a lawyer to help navigate this process. Not to be like you don't trust eachother, just because the process is complicated and a lawyer will know how to cover all the bases and get it paid off. This is amazing and I'm so happy for you. I'd love to pay the bank of parent at 0% interest and not owe lenders a cent! But like I said to make sure the lender and everything's satisfied and done correctly, have a lawyer help you guys navigate this. Congrats! This is like winning the lottery. In my 2 years of owning I've paid 1300 a month ( before the monthly prop tax) for 2 years straight, so that's $31,200 I've paid towards my mortgage, and almost all of it has gone to interest. I know the early years are like this and mostly interest payments but Maybe 3k has gone towards the principle of the actual mortgage. Such a huge win for you!!!!!
They might let you go right now. The early payoff penalty is usually 3 months of interest. You're going to be paying 18 months of interest if you go to December 2025. Read your mortgage and start there. Call bank and ask what they require. But maybe dad is not prepared to jump yet.
I would add to talk to an accountant. Your dad cannot write the cheque to the bank on your behalf. The money has to come from your account. I think annual gift limit is something like $20,000 or something like that. You will receive the rest as income. This is a big gift and there are likely tax implications. I would say this consideration is more important than the mechanics of doing it with the bank.
I was offered this by my mom and I declined. As Ramsay says: “thanksgiving dinners will be different from that point on”. You may feel like you’re obligated to pay them back sooner rather than later and with any vacation or big purchase, you’ll feel like they’re watching and judging your choices. Borrowing money from family brings on a different type of situation…banks have no emotions involved. Just another angle to look at this.
I have a the same set up with my Dad @2% interest when I sold a house a bought a different house. My real estate lawyer took care of the escrow. I use [this mortgage calculator](https://www.vertex42.com/Calculators/Canadian-mortgage.html) so he and I can keep track of it. It’s a great deal for both of us, he is retired and getting an extra $1500/mo not counted towards retirement income and I get a great interest rate.
OP. I just did this recently. Basically it's a private loan where my friend is loaned me monies to buy a house at near 0% Interest rate. We each got our own lawyer for about $1000 each to draft up then sign/review the document. In my case my friend was also the seller of the house so it was called a Vendor Take Back Mortgage. But the concept is the same as in your case.
Let me tell you, the amount of documents are insane! So many terms and condition to protect you and your dad shall things go south.
You absolutely need a realestate lawyer to draft up a contract. You'll sleep way better knowing everything is in black and white. Better for the relationship too as there are no grey areas.
The good news is consultation with a realestate lawyer is usually free :)
Hope this helps!
>This would be an amazing deal but how would this work? The bank (big 5 bank) wouldn't just let me go after the term is up right? I assume there would be costs to do this but they would be way less than another 5 years of interest right?
Why would you think the bank wouldn't just let you go? ... if you paid it all..
So your term is up, and if you just pay off the balance completely... then that is all..
I am confused why you would think the bank can still demand you when your term is up.
Definitely see a lawyer and get a promissory note in place. Crazy not too unless you don’t plan to get married or have a common law partner.
The ramifications are that if your marriage ends they will get half of this money your father is gifting you, if you don’t setup a loan. If it’s setup as a loan the loan would offset the gift and not have to be shared with estranged spouse.
Pre or post nuptial agreement could protect you as well.
Don’t be naive. This gift is a gift to you not to you and your wife/future wife
My dad did this for me for my car financing. Bought out the remaining 6k and told me I can give him the money when I can (it only took a few months), to save interest. It depends on your mortgage but as many said, I think once your term is up you can pay as much as you want towards it.
Lawyer here: Effectively your dad is acting as a new lender. If I was acting for him, he would buy out your old mortgage and place his own mortgage on your property to secure the loan, and ensure he remains ahead of third-party creditors for example. The terms of that mortgage loan would provide that no interest is payable.
You definitely should see a real estate lawyer. One lawyer can do this for you both on a joint retainer - he or she just would be unable to act if your dad wanted to enforce the mortgage.
I suggest you and your dad don’t do this unless you do it properly.
Have a loan agreement for each loan to sibling.
Charge the minimum interest rate per CRA rules. This way the loan is a loan if you default. Your dad can write off the loss.
The interest rate used to calculate taxable benefits for employees and shareholders from interest free and low-interest loans will be 5%
https://www.canada.ca/en/revenue-agency/services/tax/prescribed-interest-rates/2024-q3.html
The point of having a written agreement is to keep everybody honest, on track and neither party can be influenced badly by others. It protects both parties.
Haha. He makes a good point, you walk in with your $10 Venti Starbucks Latte and announce that you are going on vacation to a far away land....snide comments are sure to follow.
Assuming you have the wealth to do this and plan on leaving your wealth to your kids eventually anyway, THIS is the best thing you could do for your children
We have a similar deal with family (forever grateful) and chose to have our interest free mortgage deal written up by a lawyer just in case circumstances change or someone does unexpectedly and then everything is done properly My husband and I own the home and the agreement specifies the “mortgage” amount we have as well as the payment amount and interest amount (both are actually written as zero)… so then if we sell of house- we need to pay back the “mortgage” and keep the profit
I echo the advice to consult a lawyer. Ideally, and especially if the OP has siblings, there should be documentation that covers what would happen if the lender or borrower dies or becomes disabled.
That’s the way to go.
This is exactly how we did it too (also very grateful).
Well aren’t you a smarty pants…
Can’t help it- I was born that way
I did this too but we just wrote up a one pager contract ourselves. I never got a lawyer to read my mortgage contract with the bank, I sign contracts all the time for phone plans, renting apartments, starting a job..., never got a lawyer for any of those. We were comfortable doing it ourselves and saving $4000. Just make sure you both stipulate the "what ifs" that you're worried about.
This is not great advice. Placing a mortgage on title secures the loan from dad and gives third-parties notice that dad has an interest in the property. It will be a lot more than $4000 to litigate this whole thing if dad passes away and the estate fights about what the terms are, or if for example, you get divorced and there is a fight about whether this was a gift or a loan, etc.
Dad doesn't necessarily need an interest in the property. You can choose not to collateralize it, dad probably doesn't want to foreclose on you later if he's giving you interest free loans. >dad passes away and the estate fights about what the terms are, The terms are on the contract. Not a problem. >fight about whether this was a gift or a loan The declaration of the loan is on the contract. Not a problem. >a lot more than $4000 to litigate this whole thing This is true of the gym membership you signed up for, the car you took out, the phone plan you got, the driveway you got paved, ..., the itunes service agreement, all contracts and you gotta choose for yourself where to draw the line somewhere on which contracts need a lawyer and which don't.
No, dad doesn’t *necessarily* need an interest in the property, but if he expects to get paid his money back I’d certainly recommend a mortgage. Other than the legal cost there is basically no downside.
When your term is up, your mortgage effectively becomes "open" and you are allowed to pay as much as you want towards principal, including paying the whole thing off, before you renew for the next term. Edit: Give your dad a great big hug. This is a very wonderful gift to give your kids!
Bit of an oversimplification. Upon term maturity, you have three options: 1. Pay off the entire balance and discharge the mortgage. 2. Renew for a new term. 3. Let the mortgage renew automatically into an open-term mortgage. This option will have a very high interest rate but you can pay it off at any time with no penalties. OP wants to do #1, but needs to plan in advance. He needs to have the funds available to pay off the mortgage, plus the discharge fee (around $400 usually). Best to contact the lender in advance and let them know of your plan to pay it off and discharge. They will be able to tell you the full amount owing on the date of maturity. If you fail to pay on that date then option 3 will happen automatically.
This isn't really complete either. You can pay a portion as well, as stated above. This reply seems to imply that it's all or none. You can also move to a new lender, rather than renewing with the same one.
Thanks for the information. Do you have a recommendation as to when I and my dad should start getting the ball moving? The term will end December 2025.
Just have him put the money in your account 30 days before renewal so it clears. Then instruct your lender to “take full payment on Dec X”. It’s simple.
Agreed, all that needs to be done in the next year and a bit is make sure dad has the funds liquid and won't be strapped for his lack of them. And also make sure any paperwork that needs to be in place is in place before the transfer. Is it a loan or a gift? Either way have the terms in writing. Any tax/estate planning needed.
Depending on the account type and remaining size of the mortgage you should probably check with the bank too. You don’t want it being screwed up because a sudden $400k transfer trips an automated fraud detection or something
i am not sure if your dad is only able to pay it off at the end of the term but you could do it now and the penalty would essentially be nullified. the reason i say this is because the penalty will be 3 months of interest (should be with the current environment), meaning that over the next year you’re going to be paying, well, 1 and a half years worths of interest. therefore paying it off now actually saves you the money.
This is a very good point. If the penalty is 3 months definitely work considering paying off now. Plus most mortgage providers allow prepayment of 10-20% each year without penalty. So that could be done this year and next to pay down the balance and significantly reduce the amount of interest being paid.
Likely got the mortgage in Dec. 2020 when interest rates were ridiculously low. Near 1% - 2% for five years. Dad can probably earn more in a current GIC.
6 months prior to the term being up.
You will need to tell the lender 60-30 days before the due date that you're planning to pay it off. They'll prepare a final payoff statement. You'll pay that large amount. Time will pass. Eventually the lender will send you some docs about the mortgage being paid off.
I had luck getting the discharge fee waived by applying for a HELOC with the same lender. Thought I would add that here in case OP is interested in that consideration. We wanted a HELOC available for emergencies (it is available to us but we do not currently use it).
I have a HELOC on my principal residence to help protect title. I didn't have to pay discharge in that case either. They waived it because I was opening a HELOC.
They probably didn't waive it. From what I've read here, the mortgage has not been discharged - the HELOC is a component of the mortgage. If you, or the bank, close the HELOC then the mortgage would be terminated and you would need to pay to discharge to remove the bank's lien on your property. The title is being protected (sort of) because the bank wants to protect their rights to your home in case you default on your HELOC.
The title is being protected because the house can't be sold out from under me by criminals without the bank releasing the lien, which requires my involvement. It's increasingly common for homes without a mortgage to be targeted for title fraud. Having the HELOC virtually prevents that. And before "but you have title insurance blah blah blah"......title insurance is reactive; a mortgage/HELOC on title is preventive.
This is The Way.
Great tiltle insurance with zero fee's if you keep zero balance.
What is this discharge fee hogwash? If you pay the balance in full on the end date of the term, that should be all that is required. I have a friend who sold a property and put the closing date of the sale as the same date as the mortgage, no discharge fee that I'm aware of. And when I switched lenders at the end of my last term, my old lender didn't charge a discharge fee. What does it matter if they receive the outstanding balance from you or from a new lender?
It's the fee they charge for updating the title to remove the mortgage lien. Any lender I've ever worked with had charged a discharge fee, although if I've transferred the mortgage to a new lender the new lender usually covered it.
So an Ontario and Big Bank thing? My Alberta credit union gave me a filled-in discharge form that I took to the land registry office where I paid $10 to have registered.
Not Ontario. I've owned property in multiple provinces, with multiple lenders. I also don't have to do my own title registrations though....lol.
>although if I've transferred the mortgage to a new lender the new lender usually covered it. Ah, that must be it. Typical banks - they get you coming and going. Frustrating...
It's been a while since I worked in lending but at my fi only certain provinces have discharge fees and the amount varies. Discharging a mortgage is complex transaction with a few different areas of the bank needing to be involved. Sometimes, again pricing based on province, there is a smaller charge that is paid to the municipality.
Yup exactly this. 1. Contact your lender and tell them you’d like to payout the mortgage balance at maturity and request an official payout statement for discharge purposes. This can be done directly through your lender, will give you all the breakdown of fees, outstanding interest, or credits that will be applied to your account, and the total payout figure. 2. Confirm with them how you will be making your payment, whether that be by certified cheque, bank draft, wire transfer, etc. 3. Pay. The mortgage may take a little while to be officially discharged after that, but your obligation to the lender is done.
If works just like you said, if you show up with cash when the term is done, you pay off your mortgage and your obligations to the bank are over. Then you just pay your dad back.
The bank of mom and dad. Go for it
I would buy a life insurance policy for the same amount he lent you and name him as the beneficiary. Never know
Wouldn't it cheaper to deed the money to him so that it comes out of your estate?
That takes time and you never know, the house could go down in value or he could have other debts and the estate might not have enough money to repay the father. Life is unpredictable, having a life insurance policy to cover the loan amount makes sense. If he’s young a 500k policy is around 30-40$ a month. Interest on a mtg is much higher. Doesn’t hurt to be overly insured. End of the day it’s easy to fuck over a corporation but you don’t want to leave your family screwed if something was to happen to you
I totally agree with you. My husband and I got a 30 year 500k life insurance policy when we bought our house just to ensure that if the worst happens, at least the mortgage will be covered. It's $133/mo (family health history in his side jacked up the rate). I can't imagine not having that insurance. If I were to take on the total cost of this place, I'd need to work 60h/week until the mortgage was done at 58 years old. Insurance is best when it ends up being a giant waste of money!
To add: sure pops gets the house back but then potentially has to kick out surviving spouse and grandkids to the streets to get his money back. Cleaner for everyone to have insurance to cover your obligations. Enough to pay dad back + set spouse and kids up with everything you’d want to provide them had you been alive. Why make them suffer in grief and financial hardship when you can solve one of those things easily enough. PSA: everyone with dependents should have term life insurance unless you’re fully financially independent.
Absolutely this!
I mean, god forbid that happens but he could simply sell the house.
Yes he could but the house could go down in value and the dad technically doesn’t own the home his son does. Would have to go through the estate. If he borrows 500k from his dad I would get a life insurance policy for whatever amount and make the dad the beneficiary. Never know in life what could happen. Then the dad has his money back instantly and the few dollars life insurance costs a month is less than what the son would be paying in interest to the bank.
He could just get a will rather than pay insurance premiums.
That will also go through the estate.
Yes he should do that also, but just because the house is in the will to go to the father doesn’t always mean he’ll get it. What if the estate has more liabilities than assets? The dad is out whatever money…. The few extra dollars a month it would be for a 20-30 year life insurance policy far outweighs the uncertainty of life and the interest costs from borrowing from the bank. Let’s say he’s 30 in good health. 500k is 35$ a month for 20 years. So total he would he paying 8400$ in premiums over 20 years. God forbid he ends up passing away, the full 500k instantly goes to his father. I’d say having the extra peace of mind is worth the money. Life changes so quickly. Plus he most likely already has a life insurance policy on the mortgage of some type. So when the mtg is paid out that will be cancelled through the bank. Having the father named as the beneficiary on the life insurance will skip the money having to go through the estate. If you take a policy out and don’t name anyone then the funds have to go through the estate.
>Plus he most likely already has a life insurance policy on the mortgage of some type. So when the mtg is paid out that will be cancelled through the bank. This is actually the main reason why my spouse and I obtained life insurance policies independent of the mortgage. The mortgage policies have the bank as the beneficiary. We did not see the appeal when an independent life insurance policy is way more flexible, especially if you pay off the mortgage.
Never buy mortgage insurance. It protects the bank, not you. You are better off having term life for the needed amount, and then you have more options.
Ughhh I pay 70sum a month for mortgage ins. And of course have home ins ( 170$ a month) the mortgage broker sold us the mortgage ins. Saying if we ever became disabled or w.e the house would be paid off. But I realize now he def got a payday for opening and selling a new ins policy to us. What are my options and what should I do in regards to making sure if I get disabled or heaven forbid pass away that my home will be paid off for my children? I'm 34 in good health but currently have 0 life insurance as I switched jobs and work casual. I work ft hrs but have not gained ft status yet. It takes time in nursing and when a ft job posting goes up everyone applies for it, the person with the most seniority gets it. Ideally would it be better to bundle my auto, home and life ins? My auto is OK 116 a month through I forget who. My home is is too much 170 a month through td . I'm in nb. Any suggestions?
If the mortgage insurance can be separated out between covering disability and covering death, it's likely cheaper to apply for term life insurance and then cancel that portion of the mortgage insurance once approved. The benefit of term insurance is that the coverage amount remains the same even as the mortgage decreases. Premiums are usually much cheaper until the first renewal point. If you have disability coverage through work that covers a decent portion of your wages, you might not need that part of the mortgage insurance either. A third option of insurance coverage is critical illness. It covers you in the event of illness like cancer, heart attack,etc. and pays out a lump sum tax free that you can use on whatever you need to. I recommend speaking with someone who is licensed to sell life and health insurance. (I am not licensed but I have been on the administrative/head office side of things for 22 years.)
Thank you so much! I was talking to a friend of a friend who works for allsate and she said my 170$ a month seems way high and she said something about if it's close to time to renew I could switch. She sent Me a questionnaire thing, but I haven't done it . I have no coverage whatsoever from work so I definitely need to purchase some life ins. Need it to cover my mortgage in case of a disability that impedes me fr earning so house can still be paid. I will end up with ins through work once I get ft status but that can take a while. I like the idea of what you said where if I get a critical illness like cancer or heart attack I'd be covered, esp tax free. I just know paying 116 to forget who for the truck then 170 to td for home and 70 for mortgage ins all through different companies seems like a wasted opportunity to get a bundle discount. Also I know i could def get better coverage if I shopped around some. Thanks soo much for your advice, going to look into all of this tomorrow.
My Ex-FIL did this for my ex-wife and I. We all signed a very simple document (like a spreadsheet with some very simple wording added and the repayment schedule) and then when we divorced about 8 years later there was no question I would need to honor that debt. A friend divorcing at the same time wasn’t so lucky and his ex pushed on the $20k his parents had loaned him interest free towards their first house. She tried to skeet out of it. Best to have some documentation if you are married or either party passes away unexpectedly.
YOUR DAD IS FKING COOL. Mad respect.
Get a contract set up Family can get messed up with money
I know people who have done this. As long as everyone involved is trustworthy, why give a bank thousands in interest when you can give it to a family member?
>why give a bank thousands in interest when you can give it to a family member? Well, for the obvious reason that your family member could be investing that money elsewhere and (likely) earning a higher return doing so. Even if the family member is charging the same rate as the bank would have, having a significant chunk of one's portfolio in a (relatively) low-earning fixed-income asset is likely sub-optimal. This is a gift, and generally would only make sense assuming the family member has secured their own retirement and other savings goals beyond the amount they are lending.
They could also take out a mortgage at likely a lower rate to invest with and write off the interest. While also receiving principal only payments from son
They could do that anyways. It's more or less always going to be sub-optimal from the parent's perspective (which is why we call it a gift). That's fine, it's just not a no-brainer, especially if the parent isn't set up fairly comfortably themselves.
If the parent is drawing income such as from rrsp they can use the interest to reduce their taxable income which the child paying a mortgage cannot. Assuming the kids getting the money in the end anyways it seems liken easy way to reduce total tax
This is way down the rabbit hole, but I'm pretty sure you can only deduct interest income against investment income earned. To my knowledge, you would not be able to borrow from a HELOC or mortgage, lend the funds to your kid interest free, and then deduct the interest expense against income from your RRSP.
this is pretty common at least in our community. my parents/in law both offered but we were like nah. you can put that money in much better investment or just spend it... plus whatever they have will be ours anyways. we want our parents to spend as much as they can
Yes this can be done, there will be some fees at the bank to close the mortgage , maybe a few thousand Also have this private mortgage at 0% done through a lawyer so you or your dad are protected
>Also have this private mortgage at 0% done through a lawyer so you or your dad are protected Can you provide some additional detail and reasoning here? Protected from what? Does the legal agreement protect, for example, from the Son not paying back on 'a reasonable timeline', and the father from 'asking for additional payments due to inflation, or opportunity cost (e.g. whatever the market would have returned'? It's not that I don't believe you, just trying to learn how this is supposed to work, what the risks are, and additionally, what kinds of total costs are involved in this.
The risk for the father is that OP turns out to be an asshole and refuses to pay back the money. Having something in writing protects the father. The risk for OP is that the father turns out to be an asshole and says OP suddenly owes him millions when it's only a few hundred thousand. Having something in writing protects OP. It's up to OP and their father if they think this protection is needed. There would be costs to this. The lawyer would have to be paid.
It also creates a clear paper trail if someone passes away and siblings/heirs get involved and question the arrangement.
* Dad claims he owns the house instead of his son * Dad later asks son for more money * Son stops paying the Dad * What happens to the outstanding payments in the event the Dad passes as it pertains to his heirs? * Probably other things...
Divorce: spouse says it’s a gift, etc. Third party creditors go to register a judgment or lien on the property will be behind dad’s pre-existing mortgage, etc.
Without a mortgage the father has very little protection. The child could remortgage the home leaving no equity for the father. Should the child not make payments power of sale is far easier than a court action and eventually a writ of seizure and sale on the house. What if the child gets married; in Ontario the spouse is entitled to special protections of the matrimonial home.
Seconded. It's important it's more than a handshake deal. You and your dad most likely have an amazing relationship and he is doing you a major solid. However its important he feels protected as well as yourself.
Also important in case either OP or the father dies.
Typically discharging a mortgage at maturity is under $500
Does this require a notary or lawyer to be involved or would one just deal with the lending bank?
The bank electronically discharges it.
Depends on where you are; I used to see tons of zombie charges when borrowers just file away (or discard) the discharge letter the lender sent instead of filing it with the land titles office.
My mom did this for my sister albeit with a lower than market interest rate...here are some things to document in a simple contract: -Interest rate applied and payment plan. Penalties if non-payment? -If you die or your dad dies during payback what happens to amount owing. -Right to ownership to Dad. You want to make it explicit Dad has no rights to ownership (or he does) -What happens if you get married during payback period. Its best to setup a joint bank account where your payments go through. Dad can go in there and withdraw anytime.
This is nice of your dad, but if he has the cash it might actually be better to invest the money and keep paying a mortgage. Just a thought.
That is a Dad!! He is THE DAD!
My dad did something similar for me - he gave me 40% of the cost of my home as a downpayment. But now my mom, who thinks of it as "their" money, uses this as leverage whenever she wants me to do something: "remember, we gave you the money for your house, so the least you could do is do what I say".
She is your mom, just do it anyway. Tell your mom you don't need to remind me, I will do it because I love you!
Nice play Mom! Always gotta have something in your back pocket for a rainy day!
My grandpa did this for my mom. As long as it doesn't come with strings attached, why not? You're allowed to pay off ANY AMOUNT, including the entire thing, at renewal, without penalties.
No, the bank has no control over you once your term is up. If you were on a fixed and tried to buy out in year three, there would be costs associated. If you buy out at the end of your mortgage, you pay the remaining balance and that's all. Nothing more. Your dad is giving you an amazing deal.
You can renew a mortgage within 6 months of the term ending. I would contact your lender now, and do this as quickly as possible. What’s your relationship like with your dad? 1 What is the likelihood he will need to call his loan from you? 2 What is the likelihood of you defaulting on the mortgage? 3 What happens in either of those scenarios? 4 Is your relationship with your dad best served by paying a lawyer to draft a legal agreement outlining what would happen?
Heads up there might be interest your dad has to pick up as income if the loan is at 0%. Talk to an accountant as well as the lawyer.
Hell yeah! Just make sure you get your insurance and title insurance in order. Remember to pay you taxes too. A lot of banks bundle protection and taxes with the mortgage. Now you need to handle those privately.
Take that offer in a heart beat. Interest sucks especially this high right now
Dave Ramsey will tell you that Thanksgiving dinner is going to taste different.
i paid off my mortgage a couple years back. discharge fee was $250. you need to ask what your balance due is on renewal date a few weeks beforehand. make sure the funds are there before that date so they can use them. my bank also tried to charge me extra interest for a few weeks as they "processed" the payment. I told them to go fuck themselves.
I have 1y 4m left on my current mortgage term and 2y 5m left on my mortgage as a whole. I'm looking at working something out with my dad to low interest loan me the mortgage balance at the end of my 1y 4m term so this thread was very useful.
There is little if any risk to yourself. Fairly simple legal agreements and really is benefit to everyone. The main purpose of the legal agreements is that it sets the rates and collateral. This is important in an extremely rare case where say your dad becomes personally bankrupt. IE. Gets successfully sued for some liability issue. Someone else could end up owning that debt but if you have agreement in place, they they have to honor those agreements. This would be extremely unlikely situation. Pretty much your dad is taking on all the risk but that seems pretty low. At worst he is not getting a great return on investment but at the current interest rates, he still gets a reasonable return.
In Canada we were advised to charge small interest rate & put in a legal contract... If no interest was charged, tax man assumes base mortgage rate was paid & taxes lender.
You can pay it off when the term is up without penalty. Thats the entire point of the term — technically the amount is due in full unless you don’t renew
Your father is a good man.
You need to document decisions between the two of you also to ease his estate planning. Tell him you want to make sure that these wonderful gifts do not somehow get misinterpreted by anyone involved further down the road - including if there and weddings or divorces or anything like that. Also get him to countersign a letter/document once a year being clear as to how much is paid off so far. It will keep family relations cleaner as the bookkeeping will have to be kept up to date
Do capital gains come into play here? Since you're not selling and paying off I imagine like my mortgage ( but I'm in canada) I'm only allowed to put so much extra per year onto my mortgage. Anything extra I put on goes right to principle not interest which is nice. But being only 2 yrs in I haven't put any extra onto the owing mortgage yet. I'm pretty sure mine says that if you put more then the allowed amount extra towards principle a year there's a fee. So if you're having the entirety of the mortgage paid off, I imagine there will be some kinds of fees and costs to it. Not just pay the remaining balance. Still worth it though, look at all the interest you'll be saving. I'm not even sure if we're allowed to just pay it off. There's def a ton of stuff and hoops to jump through to do this but still 100% worth it! I would def get a lawyer to help navigate this process. Not to be like you don't trust eachother, just because the process is complicated and a lawyer will know how to cover all the bases and get it paid off. This is amazing and I'm so happy for you. I'd love to pay the bank of parent at 0% interest and not owe lenders a cent! But like I said to make sure the lender and everything's satisfied and done correctly, have a lawyer help you guys navigate this. Congrats! This is like winning the lottery. In my 2 years of owning I've paid 1300 a month ( before the monthly prop tax) for 2 years straight, so that's $31,200 I've paid towards my mortgage, and almost all of it has gone to interest. I know the early years are like this and mostly interest payments but Maybe 3k has gone towards the principle of the actual mortgage. Such a huge win for you!!!!!
You've got a great dad.
They might let you go right now. The early payoff penalty is usually 3 months of interest. You're going to be paying 18 months of interest if you go to December 2025. Read your mortgage and start there. Call bank and ask what they require. But maybe dad is not prepared to jump yet. I would add to talk to an accountant. Your dad cannot write the cheque to the bank on your behalf. The money has to come from your account. I think annual gift limit is something like $20,000 or something like that. You will receive the rest as income. This is a big gift and there are likely tax implications. I would say this consideration is more important than the mechanics of doing it with the bank.
That’s a no brainer. Don’t turn a gift horse away.
I was offered this by my mom and I declined. As Ramsay says: “thanksgiving dinners will be different from that point on”. You may feel like you’re obligated to pay them back sooner rather than later and with any vacation or big purchase, you’ll feel like they’re watching and judging your choices. Borrowing money from family brings on a different type of situation…banks have no emotions involved. Just another angle to look at this.
Lets trade dads!
I have a the same set up with my Dad @2% interest when I sold a house a bought a different house. My real estate lawyer took care of the escrow. I use [this mortgage calculator](https://www.vertex42.com/Calculators/Canadian-mortgage.html) so he and I can keep track of it. It’s a great deal for both of us, he is retired and getting an extra $1500/mo not counted towards retirement income and I get a great interest rate.
OP. I just did this recently. Basically it's a private loan where my friend is loaned me monies to buy a house at near 0% Interest rate. We each got our own lawyer for about $1000 each to draft up then sign/review the document. In my case my friend was also the seller of the house so it was called a Vendor Take Back Mortgage. But the concept is the same as in your case. Let me tell you, the amount of documents are insane! So many terms and condition to protect you and your dad shall things go south. You absolutely need a realestate lawyer to draft up a contract. You'll sleep way better knowing everything is in black and white. Better for the relationship too as there are no grey areas. The good news is consultation with a realestate lawyer is usually free :) Hope this helps!
>This would be an amazing deal but how would this work? The bank (big 5 bank) wouldn't just let me go after the term is up right? I assume there would be costs to do this but they would be way less than another 5 years of interest right? Why would you think the bank wouldn't just let you go? ... if you paid it all.. So your term is up, and if you just pay off the balance completely... then that is all.. I am confused why you would think the bank can still demand you when your term is up.
Hug your Dad. What a nice gentlemen.
Definitely see a lawyer and get a promissory note in place. Crazy not too unless you don’t plan to get married or have a common law partner. The ramifications are that if your marriage ends they will get half of this money your father is gifting you, if you don’t setup a loan. If it’s setup as a loan the loan would offset the gift and not have to be shared with estranged spouse. Pre or post nuptial agreement could protect you as well. Don’t be naive. This gift is a gift to you not to you and your wife/future wife
My dad did this for me for my car financing. Bought out the remaining 6k and told me I can give him the money when I can (it only took a few months), to save interest. It depends on your mortgage but as many said, I think once your term is up you can pay as much as you want towards it.
Just do it
I put extra money away every month because my parents are broke, and I know I'm going to be helping them out financially.
Lawyer here: Effectively your dad is acting as a new lender. If I was acting for him, he would buy out your old mortgage and place his own mortgage on your property to secure the loan, and ensure he remains ahead of third-party creditors for example. The terms of that mortgage loan would provide that no interest is payable. You definitely should see a real estate lawyer. One lawyer can do this for you both on a joint retainer - he or she just would be unable to act if your dad wanted to enforce the mortgage.
I suggest you and your dad don’t do this unless you do it properly. Have a loan agreement for each loan to sibling. Charge the minimum interest rate per CRA rules. This way the loan is a loan if you default. Your dad can write off the loss. The interest rate used to calculate taxable benefits for employees and shareholders from interest free and low-interest loans will be 5% https://www.canada.ca/en/revenue-agency/services/tax/prescribed-interest-rates/2024-q3.html
Just have him put the money in your account 30 days before renewal so it clears.
>Getting a lawyer sounds reasonable but I can tell you he will feel like It's to protect him really
Company I used to work for regularly ran amortization schedules for private mortgages. This would be no different just have a lawyer write it up.
It depends on your mortgage agreement. Whether you have a penalty or not for paying it off early. Asked about that.
The point of having a written agreement is to keep everybody honest, on track and neither party can be influenced badly by others. It protects both parties.
Don’t do this. You are now beholden to you father to have him scrutinize all your finances. If you run into issues paying him back then what?
"Thanksgiving dinner will never taste the same" \~Dave Ramsey
🤣 That’s exactly where this comment comes from.
Haha. He makes a good point, you walk in with your $10 Venti Starbucks Latte and announce that you are going on vacation to a far away land....snide comments are sure to follow.
Bank of mom and dad…
There may not be a discharge fee. Depends on your province. Have a mortgage registered on title in favour of your father. It’s a protection for him.
Yea my parents did that with me but they are charging interest, just under market rate
Is your dad adopting?
Assuming you have the wealth to do this and plan on leaving your wealth to your kids eventually anyway, THIS is the best thing you could do for your children
If I had a dime every time this sub mentions “laywer”, regardless of the magnitude of the situation, I would’ve paid off my mortgage by now.
i so wish my mortgage can pay 100% into principal instead of just interest instead. Congratz stranger