SaveSavedRemoved 0

(September 24, 2021)

Intro (pre-amble): up to 13:10 mark of podcast (Canada’s post election promises; tax the flippers, ban the foreigners, eliminate blind bidding, and increase the minimum down payment cut-off to purchase a home | is China’s Evergrande shrapnel Canada bound?)

Make sure your funds/cash are ready to be cashed. This is critical in two ways;
- (i) to ensure that the deposit to place a competitive offer is ready for swift movement during the offer stage, and
- (ii) equally important but often problematic is that the funds are fully verified by the lender (see below)
Prepare to submit excessive verification documents for your down payment proceeds. You will need to provide a 90 day history and/or full verification of the source of your funds. Here are the key verification requests that Canadian banks require:
- any deposit over $10,000 (either individually, or cumulatively) in a Canadian Bank account within the most recent 90 days will require an explanation and verification of its origin (this is a standard request of all lenders, anti-money laundering policy)
- wired money from abroad (if the wire transfer was made within your 90 day history period, you will be required to provide a complete paper trail of the money transfer from its origin to Canada)
- sale of a property from abroad. If the proceeds from the sale of your property were deposited within your 90 day history period, you will be required to provide full documentation of the sale and disbursement of the proceeds of the sale (legal documents from the solicitor who handled the sale and corresponding bank statements that display the deposit of the sales proceeds into your bank account). Lenders may even request an explanation and/or full verification if the proceeds from your sale have been deposited prior to your 90 day history period (of down payment proceeds)
Provide absolute clarity regarding your residence status (Work Permit, Permanent Resident) as it determines the following:
- the amount required for your mortgage down payment, and
- possible property tax consequences (foreign buyer tax). The foreign buyer tax varies from 15% to 20% depending on which city you intend to reside in. Not all Canadian cities have implemented the Foreign Buyer Tax. At this time it is only applicable in select regions in Ontario and BC