First-time buyers
Buying your first home in Surrey when family is helping with the down payment
Gifted down payments are normal in the Fraser Valley — but lenders, lawyers and the CRA all treat them carefully. Here is how first-time buyers in Surrey structure family help so it does not stall the deal.
John & Gurwinder Gill4 min read
In Surrey, Delta and Newton, a first purchase is very often a family purchase. Parents contribute. An uncle co-signs. A sibling puts in half and takes the basement suite. None of that is unusual, and none of it is a problem — as long as everyone writes down what they mean before the offer goes in.
The deals that get uncomfortable are never the ones where the family disagreed. They are the ones where nobody asked.
First: is it a gift or a loan?
Your lender needs a clear answer, and the answer changes what you qualify for.
A gift is money given with no expectation of repayment. Lenders will require a signed gift letter from the giver stating exactly that, and they will typically want to see the funds land in your account and season there for a period before completion.
A loan from family is a debt. Even an informal, no-interest, "pay us back whenever" arrangement is a debt, and if the lender learns about it after the fact — which they often do — it changes your debt service ratios and can sink an approval late in the process.
Pick one, say which it is, and be consistent about it with everyone: the mortgage broker, the lawyer, and each other.
The paperwork that prevents the argument
If money is moving between family members, three documents are worth their cost:
- A gift letter, if it is a gift. Your broker will supply the template. It is short.
- A written loan agreement, if it is a loan. Amount, repayment terms, what happens if the home is sold, what happens if someone dies. A lawyer will draft one inexpensively.
- A co-ownership agreement, if more than one household is on title. This is the important one, and it is the one people skip.
If two families are buying together
Co-ownership is common here and works well — right up until an unplanned event. Before you are on title together, agree in writing on:
- Who is on title, and in what proportion. Joint tenancy and tenancy in common are meaningfully different, especially on death. Ask your lawyer which one fits.
- Who pays what. Mortgage, taxes, strata fees, insurance, repairs, and the split when the roof needs doing.
- What happens if one side wants out. A right of first refusal, a valuation method, and a timeline. This clause is the whole point of the document.
- What happens on separation, illness or death. Unpleasant to discuss for an afternoon. Far more unpleasant to litigate for two years.
Programs worth asking about
British Columbia and the federal government both run programs aimed at first-time buyers — property transfer tax relief, registered savings vehicles designed for a first down payment, and rebates on some newly built homes. The eligibility rules and the dollar thresholds are adjusted regularly, sometimes annually.
Rather than quote numbers here that may be out of date by the time you read this, we will check what currently applies to your price point and your situation, and we will connect you with a mortgage broker who does this every day. Ask us, or check the current provincial and federal pages directly. Do not budget on a figure you read in a forum.
What a suite really does to your approval
A lot of first purchases in Surrey and Newton only work because of a mortgage helper. Lenders will often count a portion of documented suite income toward your qualification — but the proportion varies by lender, and unpermitted suites are treated differently from legal ones.
Two things matter here, and both are worth verifying before you fall in love with a house:
- Is the suite legal? Check with the City. A non-conforming suite can affect insurance and financing, and it can be ordered closed.
- Is the income documented? A tenancy agreement and a rent history make the income real to a lender. A verbal arrangement does not.
The order we recommend
- Talk to a mortgage broker before you look at anything. Free, fast, and it tells you your actual number rather than your hoped-for number.
- Settle the family money question in writing. Gift or loan, and who is on title.
- Get a real pre-approval, with a rate hold.
- Then start looking. Not before — shopping without a number is how people fall for homes they cannot buy.
- Budget for closing costs on top of the down payment. Legal fees, property transfer tax if applicable, inspection, insurance, moving. It adds up faster than expected.
Where we fit
We are not your lender and not your lawyer, and we will tell you plainly when a question belongs to one of them. What we do is make sure the offer is written so that the financing has room to work, the conditions protect you, and nobody is signing something they have not read.
First purchases deserve more hand-holding than they usually get, and we would rather spend an extra hour on the kitchen table conversation than watch a subject removal go sideways. If you are six months out and just want to understand the map, that conversation costs nothing.