Mortgage down payment sources are quite flexible!
We will get into the popular sources and the documents required for your mortgage approval.
You may be surprised to learn that there are rules concerning mortgage down payment sources.
When your down payment is coming from your personal savings, your mortgage lender will ask you for 3 months of personal bank statements. Your mortgage lender wants to see that you have truly accumulated your downpayment. If your downpayment is in your business account, you will have to show your mortgage lender proof of transfer to your personal account.
You may use Investments such as RRSPs and stocks as a down payment. You’ll want to keep handy a recent investment statement and verification said funds are redeemable.
Using the proceeds of the sale of a property is also an option. You’ll simply provide your mortgage lender with a copy of the sale agreement. The agreement must verify (not in all cases, though – speak to us) that there is a firm sale. Your mortgage lender will also ask you for a copy of a recent mortgage statement to verify the equity and net sale proceeds. If you’re purchasing a home from a builder, in most cases, the statement of adjustments and/or an email from the builder is sufficient.
In addition, you can receive gifted funds as a down payment. The gift must be from an immediate family member or relative and non-repayable. A signed gift letter with information on both parties will be requested by your mortgage lender.
If you’re using funds from an inheritance, please have handy a copy of the will or written confirmation from your lawyer.
You will also have to verify that you have approximately 1.5% of the purchase price for closing costs.
Regardless of your mortgage down payment sources, we’ll help you throughout the entire process.
We provide fast and flexible mortgage solutions in Ontario and British Columbia.
For more information on closing costs for purchases, please click here.
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