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Can I Get a Mortgage? - Down Payment Ideas

Last updated: May 2019

If you are a first time homebuyer wondering what where you can get your down payment, and how long the money has to be sitting in your bank account, here's a source list applicable to all Canadian mortgage borrowers:

DOWN PAYMENT: You must prove the source of the down payment plus 1-1.5% more for closing costs (lawyer, inspection, appraisal, etc.). Please provide clear copies of any combination of the following as they apply to proving the source of your down payment:
• Accumulated Savings - last 90 days of applicable savings and chequing bank account statements showing applicant’s name and account number.  Explain any large deposits.  Need history from each account that held the money.
• RRSP/TFSA/Investment Accounts - **Last 90 days** of account statements showing applicant’s name and account number – RSP amounts must be at least 90 days old
• Gift - Gift letter signed by all parties, copy of actual cheque, and proof of deposit
• Sale of Property – copy of signed Offer to Purchase, your Mortgage Lender's most recent year-end statement (or more recent on-line version), current copy of the property title (30 days old max).
• Divorce – copy of divorce papers and proof of deposit OR lawyer’s proof of money held in trust
• Inheritance – legal documentation and proof of deposit
• Sale of Vehicle or other Asset – Bill of Sale, copy of your old registration, and proof of deposit
• **NO** "mattress funds" – money must be deposited and AGED for 90 days (re: the Money Laundering Act)
• Existing equity in the subject property (provide title and mortgage details outlined next)
• Existing equity in different property via HELOC (provide title and mortgage details outlined next)
Borrowed money via Line of Credit or Personal Loan (provide loan or LOC details). CANNOT borrow from anyone related to the subject property sale.

It is important to understand that the mortgage lenders are obligated to trace the source of all down payment money used in real estate transactions under the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.  This doesn't mean money must be in your account 90 days in order to use it.  Rather, that any deposits to your account within 90 days of your purchase transaction must be supported as to the source of funds (and legal!).

Like to know if you could qualify for a mortgage? Check out Can I Get a Mortgage or contact us for a free pre-assessment.

Topics: Down Payment, RRSP, Mortgages 101, FAQ