Yesterday I wrote about how new homeowners were choosing longer amortization periods to free up cash flow and still be able to purchase real estate. Coincidentally, today I came across this article in the Financial Post discussing how there’s a trend of homebuyers going to “the bank of grandma” for mortgage funding through “love money”.
I know that my own parents borrowed money from my grandparents in the early 1980s to help with a down payment for a house. Certainly, it’s not a new phenomenon, but I didn’t realize that there was a term for it.
I’m fairly positive that my grandfather made them pay back every cent with interest. At the time, the market was seeing interest rates of 20 per cent or more. I wonder what he charged them.
