Your Down Payment?

Down Payment

You can purchase a home in Canada for as little as 5% down. However this does depend on a
few different factors. These factors will include your current credit score, your debt to income
ratio, and overall purchase price. Not everyone will qualify with 5% down, it depends if you meet
the lender and insurance companies lending criteria. An additional factor when purchasing a
home with less than 20% down is mortgage insurance. Mortgage loan insurance protects the
lender in case you don’t make a payment, and is required if you have less than 20% of the
home’s purchase price down.

Purchase Price

Borrowers can put down 5% (if they meet lenders criteria) on the first $500,000.00 of the home’s
purchase price. If the home’s purchase price is between $500,000.00 and $999,999.99 you will
need to put 10% down for the portion of the purchase price that is higher than $500,000.00.
Lastly if a home’s purchase price exceeds $1,000,000.00 then the portion of the purchase price
that exceeds that limit will require 20% down.

Sources

Your down payment can come from a number of different sources. This includes but is not
limited to: personal savings, investments, RRSP (first time home buyers only), a gift from an
immediate family member. If your down payment source is a gift from a family member you must
prove the money is a gift, and not a loan, they will need to provide a gift letter that includes the
following information: The giftor’s personal information (name, address, phone number), The
giftor’s relationship to you, The dollar amount of the gift, The date they gave you the money (to
be verified in your bank statements), A declaration that the money is a gift and does not need to
be repaid. For other down payment sources the lender will also have criteria that must be met.
If you have any questions on down payments or need any mortgage information please contact
me at the number below.

Ashley Crowhurst
#MB600232
Mortgage Broker
P (604)-845-3340
E Ashley@sf-g.ca
Mortgage Architects – A Better Way