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(May 20, 2023)

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The most overlooked part of mortgage qualification -> DOWN PAYMENT VERIFICATION. It’s tedious, frustrating, annoying, insulting, mind-boggling, bizarre…ok, I think you get the message. Personally speaking, I find that the down payment verification is an all-or-nothing type of experience with many of my clients. It’s like purchasing something from IKEA. If you follow the assembly instructions you end up with the desired outcome, but if you take the common-sense-installation approach all bets are off the table…in many cases, the assembly turns into surgery. Even if you’re a carpenter or master assembler in a world-leading manufacturing plant, IKEA assemblies can get ya. That little bedside stand you just purchased will knock you on your a$$ and turn your evening upside down if you take the common-sense-installation approach. Just follow the instructions. FOLLOW THE INSTRUCTIONS.

This post is intended to set the expectation for down payment verification. Just accept it. When qualifying for a mortgage (especially these days), lenders will turn into CIA interrogation-type of characters. Everything about your down payment proceeds must be known; mainly its origin, and 120-day history. And equally important, the documentation that you provide must be up to the lender’s standard. In a nutshell, they need to be convinced that your money was not sourced from a bustling drug cartel, terrorist group, organized crime unit, or illegal tax-avoiding lemonade stand operation. The common-sense approach does not exist in this area of mortgage qualification. The lenders will ignore your explanations, pleas, complaints, human rights claims, etc. If you don’t provide what they require, they will continue to hold your mortgage hostage. Give them what they want, and move on.

a Down Payment Verification-Interrogation Unit in action

Down Payment Verification INSTRUCTIONS:

Provide documentation to the lender that verifies the following:

120-day history of your down payment proceeds (ask your mortgage broker the start and end dates that are required for the 120-day period as the date sets vary with lenders).
other than your personal income deposits, if there are any additional deposits that exceed $5,000 within the 120-day verification you initially provided, you must also provide a 120-day history of said deposit (this is known as down payment verification mutation – applicants typically show the first sign of distress/anger/frustration at this stage).
the documentation that you provide MUST display/confirm your ownership. Your name and/or account number must be displayed on the documents. Cross-reference documents are acceptable. For example, if your bank statement displays your account number but not your name, then additionally provide either an older and more complete version of the bank statement or a void cheque.

DON’T DO THE FOLLOWING:

avoid using your cell phone online banking portal for down payment verification documents as they typically do not display the account number and your name in their entirety. Abbreviations to your name and account number are not acceptable.
do not scratch out or modify any information on the documents that you provide, if you do, the lender will deem the document null and void
provide documents in their entirety, even if the final page contains miscellaneous information. For example, if you provide documents that display ‘page 1 of 7’ and you only provide 4 pages, the lender will request the remaining 3 pages.

Need help cracking the down payment verification code? To learn more about Down Payment verification and how it applies to you, call or text Marko Gelo right now at 604-800-9593, or Click Here to schedule a free, no-obligation phone call with Marko.

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