In the market today, Buyers are required to have 5% of the purchase price to put towards the down payment on a home. Buyers are also required to have 1.5% of the purchase price saved, to go towards the legal fees for the closing of the sale. There are options to assist in coming up with the 5% down payment if you are not able to save the total amount on your own.

Savings: The obvious answer. Having your own personal savings can go towards the down payment. Rather you have it saved in an RRSP, personal bank account, tax free savings account, etc... The mortgage lender will ask for 3 months account history to show that you have saved the money on your own and that there have not been any large deposits towards your account. If there was a large deposit within the last 3 months, the lender will ask where the funds came from and rather or not it was gifted to you from a relative. Mortgage lenders just want to ensure that they have all of the correct information and that everything is accurately noted before funding your purchase.

Gifted: You can have the full 5% or a portion of the down payment gifted to you from a family member. Mortgage lenders require a signed gift letter that stats the amount that is being gifted and acknowledges that the money is being given to you as a gift. Each lender has their own gift letter. Your broker will provide the gift letter template to you and will assist you with completing it.

*Note: Mortgage lenders require that you as the buyer have the 1.5% saved for the legals fees on your own. You cannot be gifted the amount for legal fees and closing costs. This shows the lender that you have invested in the purchase and that you are capable of saving on your own. It strengthens your application for mortgage financing.

Value Flex Mortgage: This is an excellent product! As a mortgage broker, I have access to lenders that offer a product known as the value flex mortgage. This allows the Buyer to borrow the full 5% or a portion of the down payment from off of a loan or line of credit. You must have a minimum credit rating of 650 to qualify for this product but it is a valuable option when you find yourself having difficulty saving for the down payment on your own.

Sale of Existing Home: If you are currently a home owner and have built up equity in your existing home, you can use the proceeds from the sale of your home to put towards the down payment on the new home.

Contact Jenna directly should you have any questions regarding your down payment options.
Call direct: 613-242-1503

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