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HELOC to new house

moekhan

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Aug 29, 2016
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I have lot of questions so I will try to as short as I can,
Current home A is paid off and we just bought a brand new home B using a home equity loan, closing is next year for that home. I am planning to move out and probably never come back to Canada.
Current home as 3 owner, Me, My bro and My sis..
New House B has Me and my Bro name on it..

1. Can I make a power of attorney by Canadian lawyer, stating that my bro has full right for the current home A and I do not have any interest in it, and behalf of me he can sale, rent or anything he wishes to do with current home A?
If yes, how can I proceed?

2. We have just given few beginning checks for House B and closing is in next year, Do I need to be there to sign an agreement on closing?
Can I just make a power of attorney to have him sign behalf of me?

3. When we get mortgage from bank, do I have to be there to sign mortgage papers?

4. Is there any way I can remove my name from current house A and future house B?

Thank You!!
 

Thomas Beyer

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I have lot of questions so I will try to as short as I can,
Current home A is paid off and we just bought a brand new home B using a home equity loan, closing is next year for that home. I am planning to move out and probably never come back to Canada.
Current home as 3 owner, Me, My bro and My sis..
New House B has Me and my Bro name on it..

1. Can I make a power of attorney by Canadian lawyer, stating that my bro has full right for the current home A and I do not have any interest in it, and behalf of me he can sale, rent or anything he wishes to do with current home A?
If yes, how can I proceed?
Yes you can. Go to a lawyer and have the paperwork drawn up.

2. We have just given few beginning checks for House B and closing is in next year, Do I need to be there to sign an agreement on closing?
Can I just make a power of attorney to have him sign behalf of me?
Yes you can.
3. When we get mortgage from bank, do I have to be there to sign mortgage papers?
You can arrange to have it signed and notarized elsewhere but you need a lot more lead time and it needs an indepth discussion with bank WAY AHEAD of time so there is no surprises.

4. Is there any way I can remove my name from current house A and future house B?

Thank You!!
Yes, by assigning or selling your interest to him or 3rd party. There may be land transfer taxes and/or taxes payable.
 

moekhan

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Aug 29, 2016
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Thank Thomas for answer in a simplest way that I can understand. Now, I think the biggest problem will be for my bro to get mortgage approval for $500,000 with his only $50,000 salary.

So, this is what I might do..
Sign a power of attorney to have my brother to be able to sell the house behalf of me., So I will not remove my back that way I will not pay any land transfer tax.
Sign a power of attorney to have my brother to buy the house B behalf of me.
Mortgage is going to be the biggest issue.
 

Thomas Beyer

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Now, I think the biggest problem will be for my bro to get mortgage approval for $500,000 with his only $50,000 salary.
..
Mortgage is going to be the biggest issue.
Why not co-qualify ? Do you have income now ?
 

Vine Group

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Hi,

The legality of a Power of Attorney (PA) is a legal question and I’d advice you to reach out to your lawyer. Let me know if you need a referral?

1 - That being said, even with a legal PA, if you are on title of the property “A”, you may run in to difficulty if at any point your brother and your sister want to make changes to the line of credit or if they want to get a mortgage. Your consent will be required and the bank may want you to sign in person with your lawyer.

2 & 3 - Once again, if you require a mortgage or credit line for the purchase “property B”. Most lenders will not recognize a PA and will require you to be present for the closing of Property “B”. I would recommend you address this ASAP with your lender before leaving. Also, it’s important to note, once you leave Canada and don’t draw a Canadian income, you will be treated as a non resident. Most lenders Down Payment required is 35% (regardless if your brother qualifies on his own) and the country your moving to needs to be on their approved list. They may require foreign income verification, credit reports, possibly banking statements and foreign rent or home ownership may be taken into account when qualifying you. I suggest addressing this upfront with your lender before you leave.

4 – If House “A” has a credit line against it that was approved based on you, your brother and your sister being on title. Technically you would need to notify the bank before removing yourself off title. Your brother and sister would need to qualify for the outstanding balance and or credit limit before the bank allows you to be removed off the loan and title. Also, removing your self off title without notifying the bank can make it difficult for future financing without you being present.

If you wish further advise or additional information, please contact us email:[email protected] or by calling 1.844.411.Vine.
 

moekhan

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Thanks Thomas and Dave,

Yes, I do have income now Thomas, and that is the only reason we are pre-qualify for house B because of my income.
My whole plan is that I do not want my family to know that I am leaving, so that is why even though I do have paid lot of money to House A, I am giving it away and whatever shares I have in other properties.
Yes, on house A we have a home equity that we will be using as a down payment House B.
We might sell House A or rent it, we got home equity on House A even though my sister is not in Canada,she gave me power of attorney, bank did gave us hard time at the beginning but since we have good tiding with bank they help us.

Thank You again
 

Thomas Beyer

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You ( and a trusted relative that takes over your affairs) may wish to discuss tax implications, mortgage refinance requirements and legal implications with

a) a mortgage broker
b) one or 2 lawyers
c) a tax expert
 

moekhan

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I do not want to create a new post since I do not want to waste space on this site..
So, I am 34yrs old, I have $20,000 in RRSP and close to $100,000 in pension from work..which I would like to take it out but our stupid government does not let us touch it..anyway here are few questions.

I am planning on trading stock using RRSP
1. If I gain any money in stock using RRSP, does it automatically get contributed in RRSP for current year?
2. If I lose in stock using RRSP, can I claim in my tax? (sorry for this stupid question)
3. Can I use my RRSP money to open up business without get charge withholding tax?
If I do get charge withholding tax, can I claim through my tax and get a full return? Keep in mind my income is above $70,000 and I am single.
4. Can any one suggest me good stock to buy short term. Also, which broker is better, I will not be doing so much trading.
4. I called my work pension to withdraw my pension if I happen to retire, they said, I can transfer to Locked in RRSP, I believe they meant. LIRA. I can withdraw 50% of LIRA if I convince that I am homeless, which I am not.
If I open up a corporation and I will be director or CEO, Can I withdraw 50% LIRA to invest?

Thank You, more questions will follow up..
 
Last edited:

Thomas Beyer

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I do not want to create a new post since I do not want to waste space on this site..
So, I am 34yrs old, I have $20,000 in RRSP and close to $100,000 in pension from work..which I would like to take it our but our stupid government does not let us touch it..anyway here are few questions.

I am planning on trading stock using RRSP
1. If I gain any money in stock using RRSP, does it automatically get contributed in RRSP for current year?
2. If I lose in stock using RRSP, can I claim in my tax? (sorry for this stupid question)
3. Can I use my RRSP money to open up business without get charge withholding tax?
If I do get charge withholding tax, can I claim through my tax and get a full return? Keep in mind my income is above $70,000 and I am single.
4. Can any one suggest me good stock to buy short term. Also, which broker is better, I will not be doing so much trading.
4. I called my work pension to withdraw my pension if I happen to retire, they said, I can transfer to Locked in RRSP, I believe they meant. LIRA. I can withdraw 50% of LIRA if I convince that I am homeless, which I am not.
If I open up a corporation and I will be director or CEO, Can I withdraw 50% LIRA to invest?

Thank You, more questions will follow up..

You can convert your pension to a LIRA which is an RRSP with lock up provisions until you are 65 ( or 67 I am not sure). You cannot take it out now unless in hardship situations.

Any gain or loss stays in the RRSP account until you take $s out at which point any money is taxed.

My opinion ( not financial or legal advice): Open an online account say TD or BMOInvestorline or QTrade and buy stocks, low cost mutual funds, dividend paying stocks, index funds, REITs or ETFs.

I like REITs and there are 30 or so in Canada and over 200 in the US. If you can't decide which one buy the index of REITs which is XRE and if you can't decide on stocks within Canada buy the whole index of top 60 of TSX which is XIU !

Plenty of online material on REITs and ETFs. Industrial, office or hotel REITs pay the most but are the most risky as opposed to apartment REITs.
 
Last edited:

KhoaN

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Yes you could commute your pension to a LIRA and then start withdrawing a the age of 55 by most provinces, 50 for Alberta. Most LIRA jurisdiction allow you to unlock the LIRA if you became non-resident and no longer subject to Canadian tax and usually it would take 2 years, you then would have to get a confirmation letter from the CRA.
Hope that helps.
 
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