If you’re looking for a trusted, experienced, and knowledgeable Regina mortgage broker to help a first-time home buyer, I am here to help. No matter what stage you are in the mortgage process, I can assist you in securing financing to get the home of your dreams. I also understand that all those mortgage rules and regulations surrounding the process can be confusing. My team and I are here to answer all your mortgage questions and take you to home ownership. In my latest tip I talk about what you need to provide as documentation to support your down payment.
When applying for a mortgage, one of the most important steps is proving where your down payment is coming from. This isn’t just a formality, lenders are legally required to verify the source of your funds to comply with federal anti-money laundering regulations and to ensure you can comfortably afford the home you’re buying.
Whether you’re buying your first home or your next one, here’s what you need to know about down payment documentation in Saskatchewan.
Why Is Documentation Required?
Lenders need to confirm that your down payment funds are:
- Legally obtained
- Readily available
- Not borrowed from an unapproved source
- Not shuffled around to overstate the available funds
- Verifying the origin of the funds helps lenders assess risk and ensures they are meeting the federal government’s strict guidelines under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act as required by the FInancial Transactions and Reports Analysis Centre of Canada (FINTRAC).
What Can Be Used for a Down Payment?
Acceptable sources for a down payment include:
- Personal savings
- RRSPs (Registered Retirement Savings Plans), non-LIRA via Home Buyers Plan (HBP) Withdrawal
- TFSA (Tax-Free Savings Account) funds
- Gifts from an immediate family member
- Sale of an asset (such as a vehicle or property)
- Proceeds from investments or inheritance
- The First Home Savings Account (FHSA), if you qualify
TOP TIP
In Saskatchewan, many first-time buyers use the Home Buyers’ Plan (HBP) to withdraw up to $60,000 from their RRSPs, tax-free, to put toward their down payment. Every statement must contain the following information – full name, or account number with additional documentation to confirm account ownership.
Note: Mobile screenshots are NOT acceptable forms of documents.
Generally speaking monthly statements are best, or quarterly statements are also acceptable provided a current balance within 30 days can be provided. Tra
What Documentation Is Required?
- Savings or Chequing Account Statements
- You’ll need to provide 3 months of bank statements showing the accumulation of the funds. We may require additional documentation for any large deposits to verify their source.
- RRSP or TFSA Statements
- These must show the account holder’s name, the amount, and a transaction history that confirms the funds are accessible.
- Gift Letter (if applicable)
- If you’re receiving a financial gift from a parent or close family member, the lender will require a signed gift letter stating that the money is a gift and does not need to be repaid. Lenders each have their own gift letter form which we will provide you. Proof that the gifted funds have been deposited into your account will also be required, and funds must be deposited to your account at least 15 days before closing, or additional verification will be required.
- Sale of Assets
- If the funds come from selling something significant, such as a vehicle, you’ll need a bill of sale and proof of the deposit into your account. In Saskatchewan, this also means showing a valid transfer of ownership through SGI (Saskatchewan Government Insurance) if it’s a vehicle.
- Inheritance or Settlement Funds
- Provide a letter from the executor or lawyer outlining the amount received and a copy of the deposit into your account. Inheritance will require a copy of the Will, and Letters Probate, to confirm you are legally entitled to these funds.
- First Home Savings Account (FHSA)
- If you’re using funds from an FHSA, include statements showing the source and confirmation of the transfer.
What Not to Do
Avoid transferring large sums between accounts just before applying for your mortgage. These movements can cause confusion and delay the approval process, as each transfer will need to be traced and explained.
Also, do not take out a loan, line of credit, or cash advance expecting to use it as your down payment unless your lender explicitly allows it…just so you know, most do not.
Get the Right Guidance
Every mortgage application is different, and documentation requirements can vary slightly between lenders. That’s where working with a mortgage broker can make a big difference. I’ll guide you through exactly what’s needed, help you gather the right paperwork, and work directly with lenders to keep things moving smoothly.
Have questions about down payment documentation or want to know if you’re ready to get pre-approved? Reach out to me and let’s get started.
PLEASE NOTE:
Mortgage rules and lender policies change all the time. Because Ryan has access to many lenders and have specialized expertise in structuring mortgage applications, he can determine the optimal way to structure your application to maximize the utilization of things like employment income, self employment income, Canada Child Benefit income, disability income, maternity leave, down payment sources, credit issues, debt ratios , etc. Choice in lenders, combined with his experience, can make the difference in qualifying and/or qualifying for the amount you want. It’s not just about the best rate, it’s about flexibility and choices.
