What is required when providing proof of my down payment?

Saving for a down payment is often the biggest hurdle when it comes to purchasing a home. Once you have your down payment saved it is important to note that you will be required by the mortgage lender to provide documentation for the source of your down payment and to fulfill this condition for your final mortgage approval. This documentation is required by all lenders to protect against fraud.

Below you will find examples of different types of documents that will be required depending on the source of your down payment.

1. Chequing account, saving account, or investment account: Your mortgage lender needs to see a minimum of a 90-day history of where the money for your down payment is coming from. We will need to provide a 90-day statement history that includes your account number and full name. It is important to note that any large or irregular transactions must be traced with the associated documentation. For example, if you have a large deposit from the sale of a large ticket item you will need to provide a paper trail of where the money came from. Additionally, transfers between accounts will require tracing with a paper trail of the funds.
2. Gifted Down Payment: Many buyers are getting gifted down payments which is an acceptable source from immediate family members such as parents, grandparents, and siblings. The mortgage lender will require a copy of your bank statement confirming the funds have been deposited into your account along with a signed gift letter from your gifter that states the down payment is a true gift and no repayment is required.
3. RRSPs: You can use your RRSPs for your down payment. If you are a First-Time Home Buyer you can participate in the Home Buyers Plan (HBP) and withdraw up to $60,000 from your RRSPs to assist with the purchase of a home. If you are not considered a first-time home buyer you can still withdraw your RRSPs but they will be taxed. We will require a 3-month history of the funds via account statements that include your name and account number.
4. Sale Proceeds from an Existing Home: If your down payment is coming from the sale proceeds of selling your existing home or an existing property you own, the lender will need a copy of the accepted offer of Purchase and Sale including any amendments and waivers. If your existing home has a mortgage on the property we will need a copy to confirm the net sale proceeds you can expect to have available for your down payment.