Real Estate

Can I move my down payment?

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  • May 6th, 2020 9:15 pm
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[OP]
Newbie
Sep 9, 2019
56 posts
28 upvotes

Can I move my down payment?

Hello all,

My down payment has been sitting in a bank account for a number of months now because I was actively looking for a home and apparently the funds need to be in the account for a minimum of 3 months.

Since everything has been halted for who knows how long, if I were to move the funds in a different account where it can grow, and let’s say I found a house next month, would the bank require the funds to be in the new account for a minimum of 3 months or would it not matter as long as I can provide a statement that it was in ANOTHER account for at least 3 months?

I know this is kind of a silly question, but I don’t want to move that money until I’m sure.

Thank you,

Tatiana Slightly Smiling Face House With Garden
Thread Summary
First time homebuyer asking silly question ☺️
25 replies
Member
Jul 4, 2018
392 posts
316 upvotes
TatiLovesFinance wrote: Hello all,

My down payment has been sitting in a bank account for a number of months now because I was actively looking for a home and apparently the funds need to be in the account for a minimum of 3 months.

Since everything has been halted for who knows how long, if I were to move the funds in a different account where it can grow, and let’s say I found a house next month, would the bank require the funds to be in the new account for a minimum of 3 months or would it not matter as long as I can provide a statement that it was in ANOTHER account for at least 3 months?

I know this is kind of a silly question, but I don’t want to move that money until I’m sure.

Thank you,

Tatiana Slightly Smiling Face House With Garden
Money can be in any your accounts
TFSA or any account but must be yours.

Invest in stock market thru TFSA and get 100% returns in an year and double your down payment ... Smiling Face With Smiling Eyes I am just joking
[OP]
Newbie
Sep 9, 2019
56 posts
28 upvotes
Lavaris1 wrote: Money can be in any your accounts
TFSA or any account but must be yours.

Invest in stock market thru TFSA and get 100% returns in an year and double your down payment ... Smiling Face With Smiling Eyes I am just joking
Hi Lavaris,

I am an avid trader and know that my down payment can be held in an investment account. My question is, if I were to move it to my investment account now, if I found a house next month, would the bank tell me that the funds need to be in the investment account for a minimum of 3 months? Or can I just provide proof that the funds were held in a bank account a minimum of 3 months prior to being transferred into the investment account?
Member
Jul 4, 2018
392 posts
316 upvotes
TatiLovesFinance wrote: Hi Lavaris,

I am an avid trader and know that my down payment can be held in an investment account. My question is, if I were to move it to my investment account now, if I found a house next month, would the bank tell me that the funds need to be in the investment account for a minimum of 3 months? Or can I just provide proof that the funds were held in a bank account a minimum of 3 months prior to being transferred into the investment account?
Proof is enough
That’s what my point is as long as it’s in any of your account
And can show proof of transferring money
It’s enough
[OP]
Newbie
Sep 9, 2019
56 posts
28 upvotes
Lavaris1 wrote: Proof is enough
That’s what my point is as long as it’s in any of your account
And can show proof of transferring money
It’s enough
Awesome! That answers my question, thank you!
I must now go trade weekly options with it all Face With Stuck-out Tongue And Tightly-closed Eyes I kid!
Deal Fanatic
Nov 22, 2015
5765 posts
5264 upvotes
TatiLovesFinance wrote: Hi Lavaris,

I am an avid trader and know that my down payment can be held in an investment account. My question is, if I were to move it to my investment account now, if I found a house next month, would the bank tell me that the funds need to be in the investment account for a minimum of 3 months? Or can I just provide proof that the funds were held in a bank account a minimum of 3 months prior to being transferred into the investment account?
I think you're confused.

The money could have been in your investment account all along.. you just needed to provide 3 months statements for your investment account.

There's no rule that says a downpayment needs to be sitting in your chequing account for any length of time. The whole point is to prove that the money is yours and not borrowed or gifted.

If you move the money within 3 months of closing, you would just provide the statements for both accounts
[OP]
Newbie
Sep 9, 2019
56 posts
28 upvotes
KanataKG wrote: I think you're confused.

The money could have been in your investment account all along.. you just needed to provide 3 months statements for your investment account.

There's no rule that says a downpayment needs to be sitting in your chequing account for any length of time
I’m not confused about where the money needs to be. I initially left it in my bank account cause I thought I’d find a house any day now. Clearly that didn’t happen (which I’m kind of happy about).

Either way, I got my answer. Thank you for taking the time to reply though Slightly Smiling Face
Deal Fanatic
Nov 22, 2015
5765 posts
5264 upvotes
The "proof" will be your investment account statements at that point.

The lender doesn't care if it was in your chequing account for 3 months prior to being transferred. They would be more interested in the 3 most recent statements, wherever the money is
Member
Nov 24, 2019
370 posts
472 upvotes
Saskatoon
KanataKG wrote: I think you're confused.

The money could have been in your investment account all along.. you just needed to provide 3 months statements for your investment account.

There's no rule that says a downpayment needs to be sitting in your chequing account for any length of time. The whole point is to prove that the money is yours and not borrowed or gifted.

If you move the money within 3 months of closing, you would just provide the statements for both accounts
I thought a down payment could be gifted by a family member?
Deal Fanatic
Apr 5, 2016
5179 posts
3685 upvotes
Calgary/Vancouver
SaskCanesFan wrote: I thought a down payment could be gifted by a family member?
It can, just need a gift letter and funds in the accounts 15 days before closing. He is just saying that for funds not declared as such as there are people that try to circumvent down payment rules.
Jr. Member
May 15, 2019
141 posts
145 upvotes
bomber17 wrote: It can, just need a gift letter and funds in the accounts 15 days before closing. He is just saying that for funds not declared as such as there are people that try to circumvent down payment rules.
Does the downpayment gift letter override the requirement of 3 months holding in the bank account?
Deal Fanatic
Apr 5, 2016
5179 posts
3685 upvotes
Calgary/Vancouver
JacobV91325 wrote: Does the downpayment gift letter override the requirement of 3 months holding in the bank account?
Yes. Don't need to show 3 month's statement if gift letter is provided. You may have to show the money is in your account but other than that, nope. Use it all the time for overseas money coming in as a lot of it is coming from family anyways.
Member
Nov 24, 2019
370 posts
472 upvotes
Saskatoon
bomber17 wrote: It can, just need a gift letter and funds in the accounts 15 days before closing. He is just saying that for funds not declared as such as there are people that try to circumvent down payment rules.
Ah, thanks I didn't know that. Are there any tax implications on money gifted from immediate family for downpayment? Looking at buying a home for the first time, but don't have 20% in my own savings to put down, so about 10% would be from my savings and 10% from father.
Deal Guru
User avatar
Mar 23, 2008
12072 posts
8363 upvotes
Edmonton
SaskCanesFan wrote: I thought a down payment could be gifted by a family member?
It can be for personal use purchases, but at least one lender (Scotiabank) was no longer allowing gifted down payments for investment purchases. The purchaser needed to show 20% down of their own money, and could borrow/be gifted above that.

Based on this thread/post:
https://forums.redflagdeals.com/heloc-l ... #p32376936
Not sure if this was ever confirmed, though. I also saw it on a FB post, but that's not exactly definitive.

C
Deal Fanatic
Apr 5, 2016
5179 posts
3685 upvotes
Calgary/Vancouver
SaskCanesFan wrote: Ah, thanks I didn't know that. Are there any tax implications on money gifted from immediate family for downpayment? Looking at buying a home for the first time, but don't have 20% in my own savings to put down, so about 10% would be from my savings and 10% from father.
For tax implication, you'll need to talk to your accountant. Personally, do not believe there is. The letter is really there to make sure the gifter has no interest in the property and the funds is non repayable.
Member
Aug 22, 2016
458 posts
256 upvotes
As long as the money is in the account 2-3 weeks before the closing all should be good.
Jr. Member
May 15, 2019
141 posts
145 upvotes
bomber17 wrote: Yes. Don't need to show 3 month's statement if gift letter is provided. You may have to show the money is in your account but other than that, nope. Use it all the time for overseas money coming in as a lot of it is coming from family anyways.
Hey, I called up RBC today with whom I have a pre-approval with. They stated I should still supply 3 months bank statements and if it’s a gift letter, it ought to be 3 months bank statements from the donor. Now I’m in a quandary.

Unsure how these guys operate.
Deal Fanatic
Apr 5, 2016
5179 posts
3685 upvotes
Calgary/Vancouver
JacobV91325 wrote: Hey, I called up RBC today with whom I have a pre-approval with. They stated I should still supply 3 months bank statements and if it’s a gift letter, it ought to be 3 months bank statements from the donor. Now I’m in a quandary.

Unsure how these guys operate.
That's stupid. He's just giving you a hard time. I know mortgage specialists from RBC that can just take gift letters. BMO for sure can just take gift letters.
Jr. Member
May 15, 2019
141 posts
145 upvotes
bomber17 wrote: That's stupid. He's just giving you a hard time. I know mortgage specialists from RBC that can just take gift letters. BMO for sure can just take gift letters.
Geez- I also have a pre-approval with Scotia’s eHome. However, it’s online and unsure about the process.

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