Can I use multiple sources for a down payment?
“Can I use multiple sources for a down payment?” — Yes. Read this and use every legal dollar to buy in Milton, Ontario.
Quick answer
Yes. You can combine multiple sources for a down payment on a Canadian mortgage — savings, a gift from family, RRSP funds via the Home Buyers’ Plan (HBP), proceeds from selling assets, and more. Lenders need clear documentation for each source. If you live in Milton, ON, you can use multiple sources, but you must follow CMHC, Genworth, or lender rules and be prepared to prove the origin of funds.
Why this matters in Milton right now
Milton’s market moves fast. Sellers often pick offers with clean financing and quick closings. Combining funds lets more Milton buyers reach the down payment they need without waiting. But sloppy paperwork kills offers. Use this guide to combine funds correctly, avoid surprises, and get a mortgage approval that holds in a competitive market.
The Canadian rules you must know (simple)
- Minimum down payment rules: 5% for homes up to $500,000; 5% on the first $500,000 and 10% on the portion between $500,000 and $999,999; 20% for homes $1,000,000 and over.
- Insured mortgages (CMHC/Genworth): Down payment must come from acceptable sources: personal savings, sale of assets, RRSP (HBP), or a gift — with proof. Borrowed money generally is not allowed for a down payment on an insured mortgage.
- Gifted down payments: Allowed if the lender receives a signed gift letter that states the money is non-repayable and shows the donor’s bank statements.
- Lender verification: Expect 90 days of bank statements, or longer, showing the funds’ buildup. Large or recent deposits must be explained and documented.
What counts as an acceptable source (and how to document it)
- Savings / chequing accounts
- Provide 3 months of statements showing funds and transfers.
- Sale of assets (car, investments, property)
- Show sale agreement, transfer of proceeds to your bank, and history proving ownership.
- Gift from family
- Signed gift letter (amount, donor name, relationship, statement that funds are non-repayable), donor’s bank statements, and proof of identity.
- RRSP using Home Buyers’ Plan (HBP)
- HBP withdrawal documentation and a plan to repay under CRA rules. Note: HBP is not a gift; it must be registered as HBP withdrawal at closing.
- Investments / sale of stocks
- Broker statements and trade confirmations showing liquidation and transfer to your bank.
- Employer relocation or incentive funds
- Company letter and transaction proof.
- Proceeds from a home sale
- Agreement of sale and closing statement showing net proceeds transferred to your account.
Not acceptable in many cases: cash from an unknown source, borrowed funds from a friend as a loan (unless disclosed and underwritten), or unsecured borrowed funds intended to be repaid immediately without documentation. If you must borrow, tell your mortgage broker — lenders must account for the new liability.
How to combine multiple sources the lender will accept (step-by-step)
- Start with a pre-approval in Milton
- Get a mortgage pre-approval from a local lender or broker. This tells you what they accept and what documentation you’ll need.
- Create a clear chain of funds
- Move each source into your primary chequing account. Don’t mix cash with large unexplained deposits. Keep transfer memos clear (e.g., “Gift from Mom”).
- Gather documents
- Bank statements (90 days), gift letter + donor bank statements, RRSP withdrawal forms, sale of asset documents, transfer confirmations.
- Provide explanations for large or recent deposits
- Lenders will flag sudden inflows. Prove where they came from and why.
- Avoid short-term borrowing for a down payment
- Borrowed money increases your debt service ratios and often kills insured mortgage eligibility. If you borrowed, disclose and show terms.
- Use a mortgage broker in Milton
- A broker knows which local lenders and credit unions are more flexible with mixed-source down payments. They will streamline documents for faster approval.
Real example — How the math works in Milton
House price: $700,000
- Minimum down payment: 5% on first $500,000 = $25,000
- 10% on remaining $200,000 = $20,000
- Total minimum down payment = $45,000
You might combine:
- Savings: $20,000
- Gift from parents: $15,000 (gift letter + bank proof)
- RRSP HBP withdrawal: $10,000 (HBP paperwork)
Total: $45,000 — properly documented and acceptable for an insured mortgage.
Checklist: Documents to prepare before making an offer in Milton
- 90 days of bank statements for accounts holding down payment
- Gift letter signed and donor bank statements (for any gifted portion)
- RRSP statements and HBP forms (if using RRSP)
- Sale of assets agreements and transfer confirmations (if applicable)
- Photo ID and recent pay stubs
- Mortgage pre-approval letter
- A note explaining any large or recent deposits
Bring these to your mortgage broker and keep digital copies.
Local tips for Milton residents — win offers with clean financing
- Use a local mortgage broker or lender who knows Milton’s market. They can speed verifications.
- If your gift donor lives outside Canada, expect extra verification and longer timelines.
- If you’re a first-time buyer in Milton, check federal and provincial incentives and local programs that may reduce your net costs.
- Time your transfers: move money to your chequing account at least 7–14 days before submitting an offer to avoid flagged deposits.
Common mistakes that cost offers (and how to avoid them)
- Mistake: “Saving” last-minute cash without a paper trail. Lenders will reject unexplained cash. Fix: show the chain of funds.
- Mistake: Using a short-term loan for the down payment and not disclosing it. Fix: disclose everything and understand it may hurt your application.
- Mistake: No gift letter for family money. Fix: get a legal gift letter and donor bank statements.
Why work with a local expert
You want someone who closes deals in Milton regularly. A local mortgage broker and Realtor coordinate bank, lawyer, and seller timelines so verifications don’t derail your offer. I represent buyers across Milton’s neighborhoods and will help you gather the right documents, get pre-approved fast, and submit the cleanest offer possible.
Action plan — 7-day sprint to prepare your down payment
Day 1: Call a Milton mortgage broker for pre-approval and list required documents.
Day 2: Gather 90 days of bank statements and ID.
Day 3: Request a signed gift letter from donor; get donor bank statements.
Day 4: Process RRSP HBP withdrawal paperwork (if used).
Day 5: Transfer funds into your primary chequing account. Take screenshots and bank confirmation.
Day 6: Send documents to broker for review.
Day 7: Get pre-approval and make offers with confidence.
Contact for local help: Tony Sousa, Local Milton Realtor and mortgage guidance.
- Email: tony@sousasells.ca
- Phone: 416-477-2620
- Website: https://www.sousasells.ca
FAQ — Milton, ON down payment questions (concise answers)
Q: Can I mix RRSP and a family gift for my down payment?
A: Yes. Use RRSP withdrawal via HBP and a signed gift letter. Provide bank statements and HBP paperwork.
Q: Can I use a line of credit for my down payment?
A: Typically no for insured mortgages. Borrowed funds increase your debt and often disqualify you. Speak to your broker about lender-specific rules.
Q: Does my donor need to be a Canadian citizen or resident?
A: Not necessarily, but foreign donors trigger extra verification and slower processing. Lenders will want proof of funds and identity.
Q: What if I sold stocks last week for the down payment?
A: Provide trade confirmations, broker statements, and transfer proof. Lenders will want to see the liquidation and movement to your bank.
Q: How much documentation will my lender require in Milton?
A: Plan on 90 days of statements, gift letters, sale documents, RRSP forms, and explanations for large deposits.
Q: Do credit unions in Milton have different rules?
A: Some local credit unions are more flexible on documentation but still follow federal insured mortgage rules. A local broker can advise which lender fits your situation.
Final word
Yes — you can use multiple sources for a down payment in Milton, Ontario. The difference between a declined application and a closed sale is documentation and timing. Combine funds legally, build a clear paper trail, get pre-approved, and lean on a local mortgage expert who knows Milton’s lenders and timelines.
Need help assembling your documents or getting a pre-approval that stands up in Milton’s market? Contact Tony Sousa: tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca
