I am going to share about how banks like to see your mortgage down payment and what they will or will not accept. It sounds simple; show them your bank statements and everything is good to go. Not so much.
The banks are very specific on what they want to see depending on how you have obtained your down payment. The standard way they like to see your down payment is the most recent 90 days bank statements from whichever accounts the down payment is coming from. They like the statements to be able to be connected so it is best for at least one of them to have your name, account number and dates on it and if there are different accounts make sure they can connect through a summary page. I will go over the main guidelines of how the bank likes to see your down payment based on different scenarios.
All down payment from savings or chequing account:Easiest way is to provide your most recent 90 days worth of bank statements. If all from same bank they should have a summary page showing your account numbers, your name and a date.If you have several savings or chequing accounts and have moved the funds from one account to another, the bank will want to see the paper trail of the funds being moved. They will possibly want a 90 day history from each account the funds have been moved from or into. This can get annoying and tedious / invasive, so it is best to leave all your funds where they are unless you have moved them more than 3 months ago. The bank won’t normally require proof past 3 months.
Part of down payment coming from RSP’s:When coming from RSP’s, a bank will want to see a current balance and usually will accept the most recent quarterly statement before that to prove a 90 day history. If you can get a 90 day history of deposits and balance they prefer that.Once they have the current balance and quarterly statement they will want you to redeem the funds into one of your accounts and show proof.
Gifted Down Payment:You can only receive a gifted down payment when purchasing a home to live in, not for rentals. (Exceptions may be made for private financing.Funds must be from a direct family member such as mother, father, grand parents or brother or a sister.Whole down payment can be a gift depending on strength of application.Do not need to be in your account previous to getting accepted offer.Lender will need a gift letter usually branded from them with the gifter’s info, signed and dated and amount being gifted.Exact amount stated as being gifted should be the amount going into the account.
Those are the main guidelines when it comes to getting your down payment organized for a home purchase.
There are always different scenarios and situations that may be an exception so feel free to ask if yours is different.
Contact me with any questions