Let’s talk about Down Payments

Let’s talk about Down Payments

For homebuyers, saving up the required down payment is often the most challenging part of buying a home. This is especially true for first-time homebuyers who don’t have the equity or proceeds from a previous house’s sale. Once you’ve saved up your down payment, we’re going to need to collect documents from you to prove the source of your money.

Here’s what lenders are going to look for, depending on where your down payment is coming from:

💵 Personal Savings and Investments. This is the most common source of money for homebuyers. Whether your down payment is in a Tax-Free Savings Account, investment portfolio, or checking account, we’re going to need to collect three full months of bank statements for any accounts that you will be taking money out of for your purchase. These statements must include your full name and account number.

💵 Gifted Funds from Family. If a family member is gifting you the funds for your down payment, an increasingly common source of funds that we’ve seen recently as housing prices continue to climb for first-time buyers, you will need a signed gift letter from your family member. You will also need to provide proof of the money transfer into your account by providing full bank statements that show the funds being deposited into your account.

💵 RRSP Withdrawal. First-time homebuyers can borrow up to $35,000 from their RRSP tax-free as long as the money is repaid within 15 years. If you’re using your RRSP’s for your down payment, you’ll need to complete a Home Buyers Plan’ withdrawal form with the company that holds your RSP’s. To us, you will need to provide both three months of RRSP statements showing the funds available and bank statements showing the funds deposited into your account.

💵 Home Sale Proceeds. If you’re an existing homeowner and you are using the equity from the sale of your home, you will need to provide us with the signed sale agreement for your home and mortgage statement, if you have one. If you’re buying a new home after your previous one has closed, we may also need a statement of adjustments from your lawyer and a bank statement showing the proceeds from the sale being deposited into your account.

If you need help collecting any of these documents, we can help. We can send you an easy and confidential link that will allow us to collect your statements directly from your bank – saving you a trip to the bank or a battle with your online banking website. We’re here to try and help make this process as easy as possible for you. If you’d like to get started or have any questions about a down payment, please reach out. We can’t wait to get started !

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