02 Sep What’s a gifted down payment?
A “Gifted” Down Payment has become very common for first time home buyers. A buyer’s family member will offer to provide a lump sum money to go towards the down payment. Often this is done because their kin doesn’t have enough funds saved for the required 5% down payment. Or, because they want to make sure their child has enough money to put down 20% to avoid CMHC premiums.
All that’s required for documentation is a signed Gift Letter from the parents, which simply states that the money does not have to be re-paid, and a snapshot of the son or daughter’s bank account showing that the gifted funds have actually been transferred. A gifted down payment is an acceptable form of down payment by most banks and lenders.
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