Real Estate

Ontario Mortgage : what's the best way to deal with downpayment funds only having been in the account recently

  • Last Updated:
  • Jun 23rd, 2018 6:29 am
[OP]
Deal Fanatic
Jul 4, 2004
7143 posts
4068 upvotes
Ottawa

Ontario Mortgage : what's the best way to deal with downpayment funds only having been in the account recently

Hi, I'm hoping someone can propose a good way to deal with a downpayment where the funds haven't been in the account for a very long time.

My wife's client is pre-approved for the mortgage but now has hit a glitch because the funds for the downpayment has only been recently in her account and her broker is saying the funds have to be there for 3 months.

If any mortgage brokers think they can help, feel free to PM me. It's for a townhouse in Ottawa, price is within comps and client did get pre-approved. The complication is that the downpayment funds came from overseas (not sure the exact details) but basically two friends are each buying a house and all the funds were transferred to the friend's account and now the friend will give the client her "half" but it's not a family member so gift letter isn't an option and even with the money in her account now, it hasn't been in her account long enough the 3 month history.

Any suggestions? Let us know. Thanks,
Mike
9 replies
Deal Guru
Feb 22, 2011
13199 posts
16784 upvotes
Toronto
Have a family member of the client "gift" the money. I don't know about all lenders but I know Scotia dose not check the source of the gift.
[OP]
Deal Fanatic
Jul 4, 2004
7143 posts
4068 upvotes
Ottawa
Thanks for the suggestions.

Actually, echoing rjg4235's suggestion, my wife just heard back from the mortgage broker's office owner who is suggesting that the one friend (who has the money in her account) provide a gift letter as her sister (it's a bit of a stretch as they aren't bio related but they did come to Canada together, are each buying a house on the same street to be near each other and do think of each other as sisters) and he seemed to imply that they don't actually check the family relation.
Deal Guru
Feb 22, 2011
13199 posts
16784 upvotes
Toronto
The reason I think they don't care is because they then have some equity in the property as collateral for the mortgage that no one can legally claim because it was gifted. I assume the 3 month holding is to show they aren't allowing money laundering by their client but if its someone else they can't be expected to be checking.
Deal Guru
User avatar
Feb 2, 2014
10418 posts
3048 upvotes
Toronto
michelb wrote: Hi, I'm hoping someone can propose a good way to deal with a downpayment where the funds haven't been in the account for a very long time.

My wife's client is pre-approved for the mortgage but now has hit a glitch because the funds for the downpayment has only been recently in her account and her broker is saying the funds have to be there for 3 months.

If any mortgage brokers think they can help, feel free to PM me. It's for a townhouse in Ottawa, price is within comps and client did get pre-approved. The complication is that the downpayment funds came from overseas (not sure the exact details) but basically two friends are each buying a house and all the funds were transferred to the friend's account and now the friend will give the client her "half" but it's not a family member so gift letter isn't an option and even with the money in her account now, it hasn't been in her account long enough the 3 month history.

Any suggestions? Let us know. Thanks,
Mike
It does NOT have to be in the account for 90 days.

However, large deposits over the past 90 days have to be sourced out. You have to prove where it came from.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Deal Fanatic
Jan 15, 2017
5314 posts
5436 upvotes
Ottawa
The broker actually suggested that your client commit fraud? And your wife is okay with this?
Deal Addict
Dec 4, 2016
1995 posts
1016 upvotes
skeet50 wrote: The broker actually suggested that your client commit fraud? And your wife is okay with this?
I'm generally a RE bull but I'm a bit disturbed by the broker's suggestion. As far as I know, "sister" in this context means legal siblings, not wishy washy "we are both female and in the sisterhood of women."
Sr. Member
Sep 9, 2014
616 posts
584 upvotes
Vancouver
Maybe don't commit fraud by lying on the application? Just a suggestion...
Deal Fanatic
Jan 15, 2017
5314 posts
5436 upvotes
Ottawa
The down payment funds came from overseas. Where exactly? Some overseas countries are going to be problematic period.

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