Two situations arise with family transfers;
- transfers between family members where there is mortgage on title; and,
- transfers to a family member where the transferee needs a new mortgage to complete the arrangement.
It should be noted that mortgage law is province specific, so lenders may have different requirements for these transfers in different provinces.
In general, if the borrowers are transferring a title between family members where there is a mortgage on title, the lender will need to consent. Technically, if this is done without lender consent, it may be a default under the mortgage, and you want to avoid that. You can expect the lender to ask for some additional information about the people going on, and coming off of, title and they may want to make sure property taxes and fire insurance are current too at the same time.
For transfers to a family member needing a mortgage, these are treated as simple purchase mortgages. The usual application/underwriting/due diligence will apply.
MIC’s often provide good options for financing family transfers where one or more of the parties don’t qualify for conventional financing. Just don’t forget to tell your lender what your borrower is planning.