Down Payment and the Next Steps

So, you’ve finally got the money the need to make a down payment on your house, congrats! So, what are some of the next steps in this process?


Confirm the details


To fulfill the conditions of your mortgage approval, you’ll need to document almost everything you do. This is required by all lenders to ensure that you are not borrowing against your down payment and to help protect against fraud.


Here’s what you will need:


A 3 Month History

You will need a 3-month history of any bank accounts that you have been using to get your down payment. One of the most important parts of this is that your name is linked to the account, as some printouts do not show a name. Talk to your mortgage advisor about this if you have any concerns


If You Had Large Deposits

If you had any large deposits within the last 3 months, you will need to show where they came from. An example of this might be if you sold a car, make sure to keep the bill of sale or if you transferred money into the account, make sure to bring the records.


If It Is a Gift

Gifted funds can only come from immediate family members (parents, grandparents, siblings). There must also be a signed gift letter and a bank statement from the giver to verify the funds.


If You are using money from your RRSP

If you are withdrawing under the Home Buyer’s Plan, the funds must have been in the account for 90 days.  Also make sure you budget enough time (about 30 days) to make sure your funds can be transferred out in time. You will also need to show a 3-month history of your RRSP


If You are Getting money from Outside of Canada

It is important to get the money into the country at least 30 days before funding. Some lenders might ask that the money must have been in a Canadian account for more than 90 days, so make sure to ask about this early!


Regularly Deposit Cash into Your Accounts

As stated above lenders do not like to see giant deposits into your accounts and they especially don’t want to hear that you’ve been stockpiling your money and not depositing it into a bank.


If the Down payment is coming from the sale of your existing house

It is important to provide a firm purchase and sale agreement, and the current mortgage statement. Some lenders will also ask for the real estate lawyer’s letter of disbursements, to see how the proceeds of the sale will be divided up.