All lenders require us to provide proof that you have the down payment and closing/legal costs—from your own resources (not borrowed).
Depending on where the down payment is coming from, certain documents are required. This is required to satisfy lender underwriters as well as insurers that you are not borrowing the down payment, which would change our lending ratios—and the funds are not laundered money into real estate.
Acceptable types of Down Payment Sources
- –Provide a 3-month history of bank statements
- -The statements must have your name clearly indicated on them—or your account number, together with something that links your account number to your name, such as a void cheque from that account—internet statements are fine as long as we can prove ownership of the account number as most don’t have a name printed on them
- -From larger deposits (greater than $1,000) that are not pay cheques—we need to provide proof of where they came from. For example:
- -If you deposited a tax refund, we need the tax return—or Notice of Assessment—or ideally, a copy of the tax refund cheque
- -If you transferred money over from a savings or investment account, we need to show 90 days savings or investment account history and the transfer our to this bank account
RRSP or Investments
- -Provide a current statement of balance
- -Provide the most recent quarterly statement, so combined we are showing the 90-day history
Gifted Down Payment
- -Provide a standard form gift letter
- -Provide a bank statement in your name, showing the matching gift amount being deposited into your account
- -Provide confirmation of the funds from the giftor’s account by way of statement