Allowable Sources of Down Payment
There are various allowable sources of down payment that you can use for your purchase. Most lenders will use in some form each of them however some are on a case by case basis.
- Saved funds – must show 3 months worth of bank statements to prove the accumulation and if there are large deposits you must prove the source of those as well
- Investment/RRSP – must prove the funds have been in the investment for at least 3 months and also show the withdrawal of the funds into your bank account
- Gifted Funds – must be from an immediate family member being a Mum, Dad, Grandma, Grandpa, brother or sister. Lenders use a gift form letter that must be filled out and signed by both parties then the funds need to show in your bank account
- Borrowed Funds – This program is called Flex Down and is a CMHC program that allows you to use borrowed funds however must show the monthly payment in the debt servicing. This program is NOT used by all lenders
NOTE: There is NO 0% Financing anymore ans has not been for a couple years of more!! If you see it advertised it is incorrect!!!!!