What are the rules for my down payment?
Minimum down payment is 5% on the first $500K, 10% on the portion from $500K–$1.5M, and 20%+ above $1.5M — funds must be seasoned 90 days or documented as a gift.
Key Points
We need to confirm your down payment is from your own savings or resources.
If someone gifts you your down payment, we need a letter confirming it's a gift, not a loan.
Using borrowed money for your down payment increases the risk, so we'll need to assess that carefully.
Generally, 'cash back' incentives can't be used as part of your down payment.
However, rebates can be used for your down payment if you're in an affordable housing program funded by the government.
Technical Research Verification
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Related Questions
How does mortgage insurance enable lower down payments?
Mortgage insurance lowers the risk for lenders, allowing them to offer mortgages to borrowers with down payments between 5% and 20%.
How will lenders evaluate my debt service ratios, and what key factors are considered?
Lenders assess your ability to repay the mortgage by calculating your Gross Debt Service (GDS) and Total Debt Service (TDS) ratios.
What property considerations impact my mortgage application?
Lenders carefully assess the property's value and characteristics, directly influencing the loan amount you can secure.
How does the 'straight switch' exemption benefit you at renewal?
The 'straight switch' exemption lets uninsured mortgage borrowers move their mortgage to a new federally regulated lender (FRFI) at renewal without needing to pass the Minimum Qualifying Rate (MQR) .