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Q. If we wanted to purchase a home in a differnt city in order for our child to have a residence when attending university for 6 years, can we use the equity from our home residence to purchase a house or would we require a downpayment. Would it need to be deemed a rental property if our son shared residence with other students, and does this make a difference on the type of mortgage it would be ie: residential or commerical.
A. In your case, this would be considered a residential mortgage and, depending on your circumstances, you could most likely use the equity in your home as a down payment for your son’s property while he is attending post-secondary school.
You do not need to deem this property as a rental property for mortgage purposes. However, it may be wise to review this with your insurance provider as you may need to purchase non-owner occupied property insurance, which is similar to your cottage at the lake, where you do not live there full time.
To ensure you choose the right plan for you, make an appointment with a loans officer who can review your unique situation and find the best option for you.
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