09/19/2024
Most home buyers know they need a down payment, but many don't realize lenders must verify the source of these funds. Sources that increase your debt, like a line of credit or credit card, are less likely to be considered. Instead, the best and most traditional options for your down payment are:
🏠 SAVINGS ACCOUNT: If you're using your personal savings, lenders will need three months of full bank statements. This includes your name, account number, transaction history, and balance history. Large deposits, such as from selling a car or a work bonus, will require explanations and supporting documents.
🏠 GIFT FROM FAMILY MEMBER: If you're receiving help from family, there are certain requirements:
▪️ A signed gift letter from the immediate family member contributing the funds.
▪️ Proof of the transfer into your bank account. This means a bank statement documenting the money moving from the donor’s account to yours, including names, account numbers, and the full transaction history during the relevant period.
🏠 RRSP WITHDRAWAL: First-time home buyers can use their Registered Retirement Savings Plan (RRSP) for a down payment under the Home Buyers’ Plan (HBP). This allows you to borrow up to $35,000 from your RRSP tax-free, as long as it's repaid within 15 years.
Have questions? Give me a call or visit the link in my bio for more mortgage info!
+1 (236) 887-822
www.equitymtg.ca
