If there is one thing that causes problems which may delay the closing of your house, it’s verification of the down payment.
On or before the issuance of a lending commitment you will be asked to provide "Confirmation of Down Payment" from non-borrowed funds in one or more of the following forms.
Down Payment from the Sale of an Existing Property
You will be required to provide a copy of the unconditional "Purchase and Sale Agreement" on your existing property. This needs to be accompanied by a copy of the statement of "Mortgage Balance" on any mortgages presently held against the property. The differences between the sale price and the mortgages owing will substantiate the funds available for your down payment.
Down Payment from a Gift
In the event that the down payment is in the form of a gift from an immediate relative, you will need to supply a letter from the giver of the gift indicating that the "down payment is not a loan and there are no terms of repayment required by the recipient."
Down Payment form Your Own Resources
You must supply verification satisfactory to CMHC and the lender of accumulated savings from non-borrowed funds. This may be in the form of a copy of your bank book confirming a balance equivalent to your down payment including the amount of deposit confirming the savings of said amount for a period of no less than three months.
Should a substantial deposit have been made recently, the source of such funds, e.g.: Bonds, Stocks, GIC’s or RRSP’s receipts will also be required.
To avoid any delay in funding your transaction, you should provide a form of the above noted confirmation at least 14 days prior to your closing date.
n e e d m o r e i n f o ?
