Many British Columbians need mom and dad to buy a home.
The Society of Notaries Public of B.C. conducted a survey of members on key real estate topics in November and found that more than half of notaries’ first-time home buyer clients are typically getting help with their down payment from parents.
While notaries don’t formally track whether or not parents contribute, how much or how they structure the funding, of the 133 notaries who participated 57 per cent said that in their experience first-time buyer clients in their community were typically getting help with their down payment. Another 30 per cent of notaries said new buyers are typically funding the down payment on their own; and others didn’t know.
Virtually all of those who are getting financial help are receiving it from parents, rather than other family members or friends: about half, 52 per cent, are receiving less than 25 per cent of the down payment; a third are getting 25 to 50 per cent; and 15 per cent are receiving more than half of the down payment from mom and dad.
The same notaries reported that almost 70 per cent of parents are gifting the money, 17 per cent are going on title, and 15 per cent make other arrangements, which includes private informal or formal loans, a second mortgage or co-signing to guarantee the loan.
“Deciding whether or not you can or should support your child’s purchase of a first home, and how to structure the arrangement is a personal choice for each family,” said Tammy Morin Nakashima, president of B.C. Notaries.
“There are several things families should consider, including whether or not the lending parents should share in ownership and how everyone should plan for the unfortunate possibility of death or divorce.”
Notaries from across the province participated in the survey.