Creative Down Payment

Creating your own down payment

Normally down payments can not be borrowed. However there are a few ways around this legally and ethically. So let’s first state that the down payment must be in your possession for 90 days and you must be able to provide bank statements to support that.

  1. You can borrow it from an existing line of credit. This should not be from the same source that is providing your mortgage, and you must be able to debt service for the payment.
  2. It can be gifted from a blood relative. A gift letter is required and you will then need to provide a statement showing that you are in possession of the funds.
  3. You can borrow it from your RRSP’s under the Home Buyer’s Plan. For a single applicant this amount is up to 35K and for a couple it is 70K. This is a tax free withdrawal and you have 15 years to pay it back.

However there is a better way to do the last step, and it’s best to start it as tax season is kicking off in February. Firstly consult a certified financial planner to find out your unused contribution room. Determine how much you need for your down payment. Take out an RRSP Loan for the amount of your unused contribution room. Then put this money in your RRSP for at least 90 days. Record this RRSP contribution on your tax return to get a refund. After the 90 days have passed take out the money from your RRSP and repay the loan. Lastly use your tax refund for your down payment.

Today I am thankful for the ability of exercise to clear my head, quiet early mornings while everyone else is still asleep and getting a peek at British farming life on the new Amazon Prime show Clarkson’s farm.

“Agriculture is our wisest pursuit, because it will in the end contribute the most to real wealth, good morals and happiness.” Thomas Jefferson

I look forward to hearing from you in regard to your mortgage needs.


p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here