DOWN PAYMENT VERIFICATION — WHAT LENDERS NEED TO SEE

Every mortgage application requires proof of where the down payment is coming from. Lenders must verify that the funds are legitimate, traceable, and acceptable under federal lending rules. Being upfront and organized early prevents delays and removes unnecessary stress during the approval process.

Here’s what every buyer needs to understand about down payment verification 👇

1️⃣ Lenders require a full 90-day history of your accounts

Lenders must see where the money originated.

✔️ 90 days of bank statements

✔️ your name, account number, and dates visible

✔️ no altered or blacked-out documents

Statements showing missing info or edits are automatically rejected, as documents must be verifiable and complete.

2️⃣ Large or unusual deposits must be fully explained

Unexplained deposits are red flags and must be documented.

✔️ gift from immediate family → gift letter

✔️ vehicle sold → bill of sale

✔️ CRA refund → Notice of Assessment

✔️ TFSA withdrawal → 90-day TFSA history

Unverified deposits or borrowed funds from friends cannot be used and may disqualify the application.

3️⃣ Gifted down payments are allowed — but only from immediate family

Gifted funds must follow strict rules.

✔️ completed gift letter

✔️ proof of deposit into your account

✔️ no expectation of repayment

Gifts from non-family members are not permitted for insured mortgages and create compliance issues for lenders.

4️⃣ You must show an additional 1.5% for closing costs

Down payment alone is not enough.

✔️ legal fees

✔️ land transfer tax (where applicable)

✔️ title insurance

✔️ adjustments and disbursements

Lenders need to confirm that buyers have saved both the down payment **and** closing-cost funds.

5️⃣ Keep funds stable once verification is provided

After submitting verification, the money must remain in the account.

✔️ do not move funds between accounts

✔️ do not spend any portion

✔️ avoid new unexplained deposits

Lenders may request updated statements before closing to confirm the required funds are still available.

💬 Final Thought

Down payment verification is one of the most important steps in the mortgage approval process. Clear documentation, stable account history, and transparent communication make the process smooth and predictable — avoiding last-minute surprises.

If you need help preparing your down-payment documentation or confirming whether a deposit is acceptable, send The Frontline Mortgage Group a message anytime.