February 26, 20263 min read
A strong mortgage plan starts by separating what is technically allowed from what is financially comfortable. Family gifts are a common source of down payment for Canadian homebuyers, but lenders need to verify that the money is truly a gift and trace where it came from.
How lenders approach it
Here is what matters most:
- The lender may require a signed gift letter confirming the amount and that repayment is not expected.
- Bank statements can be required to show the funds arriving in the buyer's account.
- Large unexplained deposits should be documented because lenders must verify the source of down-payment funds.
- If the money is actually a loan, disclose it; the repayment obligation can affect mortgage qualification.
Coordinate the gift early so the paper trail is clean before the financing deadline.
Want this applied to your own numbers?
Call Phil Cragg at 866-349-4915 or request a written comparison.
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