What are your down payment options?
DOWN-PAYMENT OPTIONS: Buyers need to show their down payment + closing cost. In addition to the down payment, you MAY need to show 1.5% of the purchase price for closing cost even though you may not use it all.
Here are the TOP 7 ways people get their Down payment together. Remember you only need 5% of the purchase price!
$300k purchase price is $15k for a down payment!
Saved in your RRSP/Savings/TFSA
Get an RRSP Loan and have active for 90 days
Borrow from parents line of credit
Borrow from credit cards or a loan
Sale of stuff you own - sell your car, crap and garage sale stuff. It actually works!
Employer / Union Matching RRSP programs
Proceeds from inheritances or settlements
1. All lenders require 90 days history of down payment unless it’s gifted from an immediate family member or borrowed down payment under our flex product on exception or if you sold an item and received a lump sum amount. If you sold an item then you need to have the bill of sale, confirmation of payment from the person who bought your item and confirmation of deposit to your bank account.
2. Large sum of deposit - lenders need to know the source it came from. If from a client then a copy of the cheque the client wrote to you and the invoice is required also confirmation of deposit to your account
3. If it’s a gift - gifted down payment can only be from immediate family member - copy of the cheque, gift letter and confirmation of deposit to the borrowers account. The birth certificate may be required for the ( donor) person gifting the funds, and in some cases —- verification of the funds from the donors account is required if the lender have any doubt that it’s not an immediate family member.
4. If coming from one of your own account that you may have transferred money from or wrote a cheque or made a draft from - lenders need to see the 90 days bank statement history of the account you’ve transferred the money from or wrote the cheque from.
5. If you sold a vehicle / jewelry or any items - lenders require a bill of sale , invoice/ receipt , copy of the cheque or email transfer or transfer however you got the money from the buyer, you need to provide confirmation and confirmation of your bank account showing the deposit. If you got few hundred dollars as cash that’s fine once the bill of sale denoted that, but it’ll not be acceptable if cash is received in large sums eg. $5000 +.
6. If you collected money in lump sum that was owed to you from someone then the lender will need confirmation of the cheque that is repaid to you. The lender will also ask for confirmation of the transaction when you loaned the money to the person. Also if there was any agreement in place then they’ll ask for that as well.
7. Sale of an existing property - confirmation of the firm purchase and sale agreement and lawyers trust ledger / Statement of adjustment
8. Settlement from divorce or accident or court case or whatever type of settlement - confirmation of documents related to the settlement and copy of the draft or cheque also confirmation of the deposit to your account.
9. Inheritance from family - confirmation of inheritance / agreement / cheque
10. Money from another country - some countries are deemed as sanction so lenders will not accept any funds from such countries. However if the wire transfer is coming from a country that is not on the sanction list for eg INDIA - then the lender will need to see confirmation of funds in the donors account from India — maybe a bank book or the bank can stamp the gift letter and sign it , wire transfer confirmation and confirmation of deposit to your account here.
11. FLEX Product - Borrowed down payment is typically not acceptable to any lenders except on a Flex product that we have on exception. ******The lender will always need satisfactory paper trail as confirmation for the source of funds.
NOTE: Before putting offers and signing financing waivers, contact me to discuss if you have any unique situation with the down payment or if you need any guidance about the process.
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