Here are the most common and acceptable Down Payment (https://clientfirstmortgages.com/jargon-buster/) sources and how each is to be verified. Keep in mind that you can use a combination of them but you will have to provide verification of each.
- Savings – All accounts will need to be verified via a 90 day history
- TFSA – Must be verified via a 90 day history
- RSP – Will require a 90 day history and in most cases verification that the funds have been redeemed via the forms to the RSP provider and have been deposited into your account
- Gift – from an immediate family member. Need to see a signed gift letter stating it is in fact a gift which is not expected to be repaid and profit it has been deposited to your account. In some cases they will want to see the source of the gift which means a statement from the person giving you the funds.
- Loan – You can use borrowed funds for your down payment through certain lenders. They will need to verify the terms of the loan if it is new to make sure you can afford both it and your mortgage
- Credit Card/ Line of Credit – This is similar to the loan as above but in this case you usually only have to prove you can afford the payments for both
- Sale of Asset – You can sell anything you own but make sure you document it properly. Bill of sale, copy of the cheque and proof it has been deposited to your account
- Gifted Equity – If you are purchasing the home of a family member and they wish to, they can gift you the equity in the home and this can be used as the down payment
- Inheritance – This is usually verified via the documents from the lawyer with corresponding deposit to your account
Contact one of our experienced Mortgage Advisers today at Client First Mortgage Solutions to discuss Down Payment options.
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