What Is A Down Payment?
A down payment is the monies a home buyer puts towards purchasing a property. In many cases, the down payment is a minimum of 5% and can be greater. Often times, the home buyer will borrower the remainder of the purchase price as mortgage, which the lender will register the mortgage charge as security on the property.
Down Payment Requirements
Institutionally, a down payment cannot come for borrowed funds with repayment terms. Banks and lender are governed by anti-money laundering regulations which they must comply with to verify the source of a borrower’s down payment. A down payment must come from a borrowers own sources, gift from family, or refinance from another property. Traditionally, the borrower must show proof of down payment from their own sources being registered with a Canadian financial institution for a period of 30 to 90 days prior to the closing date.