Questions regarding Seller Financing

[Kenny Clark]

Hello Everyone!

As the title states, I'm hoping for a bit of clarity when it comes to Seller Financing in Canada. I know there's options available to me, but I can't seem to find any information from a Canadian stand point.

I was planning on using my line of credit for a downpayment, then my banker informed me it's actually the opposite of a Heloc (ScotiaLine). I have a family member that is willing to invest, but it won't cover the 20% down payment I need for an investment property. I'm looking elsewhere than my bank, as it's not exactly investor friendly. I do already own a house with CMHC insurance, so 20% down is the lowest I can go.

I'm assuming there's different options to Seller Financing? I know there's Rent to Own, but I've been informed that's basically a last ditch effort and should be avoided. What other options are available to me?

Thank you in advance, I look forward to your replies!

[Roy N.]

@Kenny Clark

If you received the downpayment as a gift from your father-in-law, undoubtedly he will be required to sign a declaration that the funds are a gift (with no expectation of repayment).   Any arrangement between you to the contrary would need to be on your bond and off books.

Conversely, if he were to come on title as a Tenant in Common, then his money becomes his equity share in the property and you can draft an agreement whereby you buy him out over time.