There are a few different things you need to know about down payments. Today we will be chatting primarily about what precisely are approved sources of down payments. These can change but for the most part the ones below have been around in some form for a very long time.
This could be in various forms (Chq account/Savings account/Tax Free savings). Lenders usually require a 90-day history of the funds on deposit. If the funds were deposited within the 90-day period, you will likely have to show the source of where the funds came from. (ie: Pay, bonus from employer, sale of vehicle). The reason for the 90 day history is to fight crime by preventing money laundering through mortgages.
The Canadian government will let you withdraw from your retirement savings plan if you are purchasing your first primary residence (Or have been out of the housing market for at least 5 years). They will currently allow to you withdraw up to $35,000 and you have a maximum of 15 years in which to repay these funds to the RRSP.
An immediate family member is able to gift you the down payment for your primary residence (There is no limit to what they can gift you). Some lenders will allow a gifted down payment for a revenue property-but not very many.
You can use a credit line or credit facility you have access to. The funds withdrawn will be added back into your mortgage application as a payment so you will need to approve for the mortgage itself and the payment on the facility the funds are being withdrawn from.
As always feel free to reach out if you have any questions or pass this along to anyone you feel may benefit from the information.
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