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Gifted down payments

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Consistently tightening mortgage rules combined with low interest rates have caused several lenders to revise their guidelines for gifted down payments.

As per CMHC, the person gifting the funds has to be a relative and the funds have to truly be a gift (no repayment required). Traditionally, they have only required a gift letter signed by both parties along with proof of the funds being deposited into the recipient’s account. Several lenders have now adjusted their supporting document requirements and they will now need to see one of the following along with proof of the funds being in the recipient’s account:
1.       Proof of the funds being in the relative’s account prior to the transfer of funds
2.       A letter from the relative’s financial institution stating that they have adequate funds to cover the gifted amount
 
Lenders now have more pressure to evaluate the overall risk of a file and although CMHC does consider this type of down payment to be “traditional”, most prefer to have at least part of the funds from the client’s savings. That being said, we still have access to numerous lenders who still only require the gift letter and deposit and who are very flexible with down payment options.
 
For questions about this potential requirement, down payment options, or for any mortgage related questions – please feel free to contact me today.
 
http://www.christinebuemann.com
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Location: 1596 3rd Avenue, Prince George, BC V2L 3G4, Canada

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