Why is verifying my Down Payment important?
If there is ‘one’ thing that causes problems which may delay the
closing of your house it’s verification of the Down Payment. Here’s
why:
To meet the Requirements of Canada Mortgage and Housing Corporation,
GENCOR (GE Capital) and the Major Lending Institutions, 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.
The Approved Lender is not required to forward this confirmation
to CMHC, but is expected to retain the Information in its paper or electronic
loan record.
- Down Payment from Your Own Resources You must supply verification
satisfactory to C.M.H.C. or GENCOR 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
not less than 3 months. Should a substantial deposit have been made recently,
the source of such funds, i.e. Bonds, Stocks, G.I.C.’s or RRSP receipts
will also be required.
- To avoid any delay in funding your transaction we suggest
that you provide a form of the above noted confirmation at least 14 days
prior to your closing date.
If there is ‘one’ thing that causes problems which
may delay the closing of your house it’s verification of the Down Payment.
Here’s why:
To meet the Requirements of Canada Mortgage and Housing Corporation,
GENCOR (GE Capital) and the Major Lending Institutions, 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 difference between the sale price
and the mortgages owing will substantiate the funds available for your down
payment.
- Down Payment from a Gift All or part of the minimum equity
requirement may be provided by way of a financial gift, as long as all of
the following conditions are met:
(a) the donor is an Immediate relative of the borrower;
(b) the Approved Lender has verified that the money is a genuine gift; and
(c) the Approved Lender has verified that the funds are in the borrower’s
possession prior to the time of the application to CMHC or GENCOR for mortgage
loan insurance.
- The Approved Lender will verify the authenticity of the
gift by obtaining a written confirmation, signed by the donor and the borrower,
which will include the following points:
(a) the money is a genuine gift from
the donor and does not ever have to be repaid;
(b) no part of the financial gift is being provided
by any third party having any interest (direct or indirect in the sale
of the subject property)
The Approved Lender is not required to forward this confirmation to
CMHC, but is expected to retain the Information in its paper or electronic
loan record.
- Down Payment from Your Own Resources You must supply verification
satisfactory to C.M.H.C. or GENCOR 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
not less than 3 months. Should a substantial deposit have been made recently,
the source of such funds, i.e. Bonds, Stocks, G.I.C.’s or RRSP receipts
will also be required.
- To avoid any delay in funding your transaction we suggest
that you provide a form of the above noted confirmation at least 14 days
prior to your closing date.
