30 Apr

What Lenders Look for in Down Payment Documentation

Posted by: Avaljit Sandhu

By Avaljit Sandhu – Mortgage Broker in Winnipeg, Dominion Lending Centres

Why Your Down Payment Documents Matter

When you’re buying a home in Winnipeg or anywhere in Canada, your down payment plays a key role in getting approved for a mortgage. But it’s not enough just to have the money—you need to prove where it came from.

Mortgage lenders are required by law to ensure your down payment is legitimate, not borrowed, and compliant with anti-money laundering rules. If your documentation is unclear or incomplete, it can delay or even stop your mortgage approval.

What is Acceptable Down Payment Documentation?

1. Bank Statements (90-Day History)

Lenders usually require three months of bank statements showing your down payment savings. This helps them confirm:

Where the money came from (salary, savings, etc.)
No large unexplained deposits
You haven’t borrowed the down payment

💡 Tip: Make sure your statements show your name, account number, and consistent saving habits.

2. Gift Letters (If Money is Gifted)

If a family member is gifting you money, you must provide:

A signed gift letter confirming it’s not a loan
Proof of the gift amount deposited into your account

Gifts must come from an immediate relative (parent, sibling, etc.) and must be traceable.

3. RRSP Withdrawals (Home Buyers’ Plan)

If you’re using your RRSP under the Home Buyers’ Plan, you’ll need:

Proof of RRSP ownership
Withdrawal documents
Evidence the funds have been moved into your account

4. Sale of Assets

Selling a car, stocks, or other property to fund your down payment? You’ll need:

A copy of the bill of sale
Proof of deposit into your bank account
Supporting documents for asset ownership

5. International Transfers

Newcomers to Canada or those receiving funds from abroad must provide:

A clear paper trail from the originating account
Currency conversion receipts
Bank letters if needed

Lenders want to ensure international funds comply with Canadian banking laws.

What Won’t Work as Valid Proof?

Lenders may reject your application if:

You use cash deposits with no explanation
There are large, random transfers with no paper trail
Your statements are missing pages or are screenshots from apps without names or account numbers

Avaljit’s Pro Tip

As a mortgage broker in Winnipeg, I recommend reviewing your down payment docs before you put in an offer. If you’re unsure whether a document is acceptable, I can review it with you—no commitment needed.

Why It’s Important for Mortgage Approval

Lenders use your documents to verify:

You’re not borrowing the down payment (unless it’s a cashback or flex-down mortgage)
You can cover closing costs
Your savings history shows financial responsibility

Getting this step right means faster mortgage approval and less stress during closing.

FAQ – Down Payment Documentation in Canada

Q1: Do I have to show 90 days of savings?

Yes. Lenders require a 90-day history to confirm the money is yours and wasn’t recently borrowed.

Q2: Can I use cash for a down payment?

No. Cash deposits without documentation are not accepted by lenders. All funds must be traceable.

Q3: What if I get a gift from a friend?

Only immediate family members can give you a down payment gift that lenders will accept.

Q4: What if I’ve moved funds between accounts?

Provide statements from both accounts to show the full money trail.

Q5: How much down payment is needed in Canada?

5% minimum for homes under $500,000
10% on the portion from $500,001 to $999,999
20% or more if over $1M or for rental/investment properties

Conclusion

Getting your down payment documents in order is one of the smartest steps you can take when preparing to buy a home. It builds lender trust and speeds up your mortgage approval. Whether you’re a first-time buyer in Winnipeg, a newcomer to Canada, or just looking to refinance, proper documentation sets the foundation for a smooth process.

Need help reviewing your documents? Reach out—I’m here to guide you every step of the way.

22 Apr

How Work Permits Affect Mortgage Approval in Canada

General

Posted by: Avaljit Sandhu

How Work Permits Affect Mortgage Approval in Canada

By Avaljit Sandhu, Dominion Lending Centres

When applying for a mortgage in Canada, your immigration status plays a significant role in how your application is evaluated. If you are on a work permit, it’s important to understand the factors that lenders consider and how your work permit status can impact your ability to secure financing. This guide breaks down everything you need to know about how work permits affect mortgage approval in Canada.

1. Understanding Your Work Permit Status

A work permit in Canada allows foreign nationals to legally work in the country for a specific employer and duration. There are different types of work permits, including:

Open Work Permits: These permits allow you to work for any employer in Canada.
Employer-Specific Work Permits: These permits are tied to a specific employer and a designated job.

Lenders will assess your work permit status to determine the length of time you’ve been working in Canada, the stability of your job, and whether your employment is likely to continue. If you’ve only recently arrived in Canada, some lenders may request additional documentation.

2. Impact on Mortgage Approval

2.1 Stability of Employment

One of the key factors lenders consider when approving a mortgage is employment stability. If you’re on a work permit, lenders will review the following:

Length of Employment: Ideally, you should have been employed with your current employer for at least six months. Longer employment periods provide more assurance of stability.
Type of Employment: Lenders will also look at the stability of your job sector. If you work in high-demand fields such as healthcare, technology, or skilled trades, you may have a better chance of approval.
Income Consistency: Lenders will review your pay stubs and T4s to ensure your income is consistent and sufficient to support your mortgage payments.

2.2 Credit History and Down Payment

Lenders also look at your credit history and down payment. If you’ve been in Canada for less than a year, you may not have a long Canadian credit history. However, there are options to demonstrate your creditworthiness:

Alternative Credit History: If your Canadian credit history is limited, lenders may allow you to provide alternative credit information, such as proof of car payments, utility bills, or consistent rent payments.
Down Payment: Having a larger down payment (ideally 20% or more) can help offset the lack of an extensive credit history and improve your chances of mortgage approval.

3. Required Documentation for Work Permit Holders

When applying for a mortgage as a work permit holder, you’ll likely need to provide additional documentation. Common requirements include:

Work Permit Status: Documentation confirming the validity and duration of your work permit.
Employment Verification: A letter from your employer confirming the length of your employment, your job title, and your income.
Bank Statements: Recent bank statements will be required to verify that you have enough funds for the down payment and closing costs.
Alternative Credit History: If you’ve been in Canada for less than a year, you may need to provide evidence of alternative credit, such as utility bills or rental history.

4. Special Considerations for Newcomers to Canada

If you’re new to Canada and have been on a work permit for less than a year, it may be more challenging to meet the standard requirements. However, some lenders specialize in offering mortgage products for newcomers. These lenders may be more flexible with work permit holders and alternative documentation.

4.1 Co-Borrowers Can Help

If you’re applying with a co-borrower who is a Canadian citizen or permanent resident, it can strengthen your mortgage application. The co-borrower’s stable employment and established credit history can provide additional assurance to lenders.

5. Tips for Improving Your Chances of Mortgage Approval

Even if you’re on a work permit, there are several strategies you can use to improve your chances of mortgage approval:

Establish a Canadian Credit History: Consider applying for a credit card or small loan to build a credit history in Canada.
Save for a Larger Down Payment: The more you can contribute towards the down payment, the better your chances of approval, especially if your credit history is limited.
Work with a Mortgage Broker: A mortgage broker can help you navigate the mortgage approval process, especially if you’re on a work permit. Brokers have access to a wide range of lenders and can find options tailored to your unique situation.

Frequently Asked Questions (FAQ)

1. Can I get a mortgage with a work permit in Canada?

Yes, you can get a mortgage with a work permit in Canada. However, lenders will assess factors like your length of employment, income stability, and credit history. Providing additional documentation, such as proof of consistent rent payments or utility bills, can help strengthen your application.

2. How long do I need to be employed in Canada to qualify for a mortgage?

Ideally, you should have at least six months of employment with your current employer. This shows that you have job stability, which is a key factor for lenders.

3. Do I need a large down payment if I’m on a work permit?

A larger down payment (e.g., 20% or more) can improve your chances of mortgage approval, especially if you have limited credit history in Canada. It reduces the lender’s risk and shows your financial responsibility.

4. What other documents do I need to provide?

In addition to the usual income and credit documentation, you may need to provide proof of your work permit status, employment verification letters, and recent bank statements to show that you have the necessary funds for your down payment.

5. Can I apply for a mortgage if I’ve been in Canada for less than a year?

Yes, you can still apply for a mortgage if you’ve been in Canada for less than a year. In such cases, lenders may allow alternative credit documentation, such as proof of rent payments or utility bills, to support your application.

Conclusion

Securing a mortgage while on a work permit in Canada is entirely possible, but understanding the process and preparing the necessary documentation is key. By maintaining stable employment, building your credit history, and saving for a larger down payment, you can improve your chances of mortgage approval. Working with a mortgage broker who understands the nuances of the process can also make the journey smoother.

20 Mar

Credit Score Myths That Could Be Costing You Thousands

General

Posted by: Avaljit Sandhu

Credit Score Myths That Could Be Costing You Thousands

Your credit score plays a pivotal role in your financial health, influencing your ability to secure loans, credit cards, and favorable interest rates. Misunderstandings about how credit scores work can lead to costly mistakes. Let’s debunk some common myths:

Myth 1: Checking Your Credit Score Lowers It

Fact: Reviewing your own credit score is considered a “soft inquiry” and does not affect your score. Regularly monitoring your credit can help you identify inaccuracies and manage your financial health effectively.

Myth 2: Closing Unused Credit Cards Improves Your Score

Fact: Closing a credit card can reduce your available credit and shorten your credit history, both of which may negatively impact your credit score. It’s often better to keep unused cards open, especially if they have no annual fee.

Myth 3: Carrying a Balance on Your Credit Card Boosts Your Score

Fact: Carrying a balance does not improve your credit score and results in paying unnecessary interest. It’s best to pay off your credit card balance in full each month to maintain a healthy credit utilization ratio.

Myth 4: Your Income Directly Affects Your Credit Score

Fact: Credit scores reflect your credit management history, not your income level. Lenders consider income separately to assess your ability to repay loans, but it doesn’t directly influence your credit score.

Myth 5: Once You Have a Poor Credit Score, It’s Impossible to Improve It

Fact: Improving your credit score is achievable with consistent, responsible financial behavior. Paying bills on time, reducing debt, and avoiding new credit inquiries can gradually enhance your score over time.

Myth 6: Only Credit Card Activity Influences Your Credit Score

Fact: While credit card usage is a significant factor, other elements like installment loans, mortgages, and even utility payments can impact your credit score. Diverse types of credit, when managed responsibly, can contribute positively.

Myth 7: You Shouldn’t Review Your Credit Report Regularly

Fact: Regularly reviewing your credit report is crucial for identifying errors or fraudulent activity. By federal law, you’re entitled to one free credit report per year from each of the three major credit bureaus.

Myth 8: Applying for New Credit Always Hurts Your Score

Fact: While hard inquiries from new credit applications can have a temporary effect, responsible use of new credit can benefit your score in the long run.

Myth 9: Paying Off a Negative Record Removes It from Your Credit Report

Fact: Paying off delinquent accounts is essential, but the record of the late payment can remain on your credit report for up to seven years. Over time, its impact diminishes, especially with positive credit behavior.

Myth 10: All Debts Are Equally Bad for Your Credit Score

Fact: Not all debts are viewed equally. For example, mortgages and student loans are often considered “good debt” when managed responsibly, as they can indicate stability and investment in your future.

Understanding these myths is crucial for maintaining a healthy credit profile. By staying informed and managing your credit wisely, you can save money and secure better financial opportunities.

21 Feb

First-Time Homebuyer in Canada: Qualifications, Incentives & Mortgage Essentials

General

Posted by: Avaljit Sandhu

Buying your first home is a big deal! It’s exciting, but it can also feel a little overwhelming. Between saving for a down payment, understanding mortgage options, and figuring out if you qualify for any government incentives, there’s a lot to think about. But don’t worry! This guide will break everything down in a simple, easy-to-follow way.

Understanding First-Time Homebuyer Qualifications in Canada

So, what does it mean to be a first-time homebuyer in Canada? The general rule is that you (or your spouse/common-law partner) must not have owned a home in the past four years. But there are a few exceptions:

If you’re separated from your spouse, you might still qualify.
Some special cases, like having a disability, may have different rules.

Since different programs have different definitions of a first-time homebuyer, it’s important to check the requirements for each one.

Government Incentives & Programs for First-Time Buyers

Good news! The government offers several programs to help make buying your first home easier. Here are some key incentives:

Home Buyers’ Plan (HBP)

Allows you to withdraw up to $60,000 from your RRSP tax-free to use for a down payment.
You’ll need to repay this amount within 15 years.

First Home Savings Account (FHSA)

A tax-free way to save up to $40,000 for your first home.
Contributions are tax-deductible, and withdrawals for a home purchase are tax-free.

First-Time Home Buyers’ Tax Credit (HBTC)

A tax credit of $10,000, which translates to up to $1,500 in tax savings.

Land Transfer Tax Rebate

Some provinces offer rebates to help cover land transfer tax fees when you buy your first home.

GST/HST Housing Rebate

Helps offset taxes paid on new homes or major renovations.

These programs can make a big difference in lowering the upfront costs of buying a home, so it’s worth looking into which ones you qualify for!

Home Financing Essentials for First-Time Buyers

Now let’s talk about money—how much you’ll need and what to expect.

Down Payment Requirements

5% for homes under $500,000.
10% for the portion above $500,000 (for homes between $500K – $1M).
20% for homes over $1M (no mortgage insurance required).

Mortgage Options: Fixed vs. Variable Rates

Fixed-Rate Mortgage: Your payments stay the same for the entire term, making it easier to budget.
Variable-Rate Mortgage: Your rate (and payments) can change based on market conditions, potentially saving you money but also carrying some risk.

Closing Costs to Budget For

Besides your down payment, you should expect additional expenses, such as:

Legal fees
Home inspection & appraisal costs
Title insurance
Land transfer taxes (some rebates available!)

Your Credit Score Matters

A good credit score (660+ recommended) helps you get better mortgage rates. If your score is lower, consider improving it by:

Paying bills on time
Reducing credit card balances
Avoiding unnecessary credit inquiries

Key Takeaways for First-Time Homebuyers in Canada

Check if you qualify for first-time homebuyer status based on federal and provincial rules.
Use government programs to reduce costs and make homeownership more affordable.
Plan your finances, including down payments, closing costs, and mortgage options.
Work with a real estate agent & mortgage expert to navigate the process smoothly.

FAQ: Self-Employed Mortgages & First-Time Homebuyers

Can self-employed buyers get a mortgage?

Yes! If you’re self-employed, lenders will look at your income history, tax returns, and business financials to determine eligibility.

Do self-employed homebuyers need a larger down payment?

Not necessarily, but if your income is harder to verify, some lenders may require a higher down payment (e.g., 10%–35%).

Can self-employed buyers qualify for first-time homebuyer programs?

Yes! As long as you meet the standard first-time homebuyer requirements, you can still qualify for programs like HBP and FHSA.

About Avaljit Sandhu – Mortgage by Aval Sandhu

Avaljit Sandhu is a trusted mortgage expert in Canada, helping first-time homebuyers secure the best financing options. Whether you’re employed, self-employed, or new to the country, Avaljit works to find personalized mortgage solutions that fit your needs.

📞 Need mortgage advice? Contact Avaljit Sandhu today!

Final Thoughts

Buying your first home in Canada doesn’t have to be stressful! With the right knowledge, planning, and support, you can confidently make your dream of homeownership a reality. Be sure to check out all the available incentives, mortgage options, and expert guidance to make the best decision for your future home. 🚀🏡

22 Nov

Credit Clean Up?

General

Posted by: Avaljit Sandhu

Time for a Credit clean up ?

📊 Time for a Credit Clean-Up? Here’s How to Boost Your Credit Score for Homeownership 🏡

Your credit score plays a BIG role in securing the best mortgage rates! If you’re planning to buy a home or refinance, now’s the perfect time to clean up your credit. Here’s how you can get started:

✅ Check Your Credit Report: Review it for errors or discrepancies that could impact your score.
✅ Pay Down High Balances: Aim to keep your credit utilization below 30%.
✅ Make Payments On Time: Set reminders to never miss a payment. Consistency is key!
✅ Avoid New Credit Applications: Too many inquiries can lower your score.
✅ Keep Old Accounts Open: A longer credit history helps boost your score.

Cleaning up your credit can take time, but it’s worth the effort for long-term financial benefits! 💡 Need guidance or have questions about improving your score? Let’s chat and get you mortgage-ready!

📞 Contact me for personalized advice on preparing your credit for homeownership!

20 Nov

Tittle Insurance

General

Posted by: Avaljit Sandhu

What is title insurance, and do i need it ?

Wondering what title insurance is and why it matters? Title insurance protects you from potential issues with the ownership of your property, like fraud, errors in public records, or title defects. It’s a one-time cost for long-term peace of mind! 🏡

In Manitoba, title insurance typically costs between $250 to $400, depending on the property value. 💰

Have questions or want to know if it’s right for you? Let’s chat! 💬

28 Oct

5 Questions To Ask About Home Insurance

General

Posted by: Avaljit Sandhu

1) Are there limits to my coverage?
Insurance policies usually come with coverage limits. Make sure to understand how much your policy covers in case of property damage or liability claims.

2) Is there an extended insurance or umbrella policy available?
Extended or umbrella policies can provide additional coverage beyond your standard policy. Ask about these options to further protect your assets.

3) What happens to my policy and premium if I have to file a claim?
Filing a claim can sometimes impact your premium or coverage. Speak to your provider to understand how a claim might affect your policy and future payments.

4) How long do I have to file a claim?
Each policy has a specific timeframe for filing claims, so knowing these deadlines is essential. Don’t wait until it’s too late!

5) How long does it take to get paid out after a claim is filed?
The time frame for claim payouts can vary. Ensure you’re aware of the process and how long it typically takes to receive funds.

For more personalized advice, contact a DLC Mortgage Professional today!
#MortgageTips

9 Oct

Why Use a Mortgage Broker?

General

Posted by: Avaljit Sandhu

Why Use a Mortgage Broker?
Did you know that using a mortgage broker can offer several key benefits? Here’s how we can help you:

Save Time: We handle the legwork of applying to multiple lenders.
Better Rates: Brokers often secure more competitive rates than traditional banks.
Unbiased Advice: With access to a wide range of lenders, we provide more options to suit your needs.
No Cost to You: In most cases, mortgage brokers are compensated by the lender, so there’s no extra cost to you.

Get the best mortgage solution with less hassle!

27 Sep

What’s Your Budget?

General

Posted by: Avaljit Sandhu

What’s Your Budget?
Don’t be house rich and cash poor! Living in a beautiful country like Canada means you should budget not only for your mortgage but also to enjoy life beyond it. A good rule of thumb is to keep your monthly mortgage payment, including property taxes, heating, and half of any strata fees, at around 32% of your gross household income. Stay within your budget and enjoy the best of both worlds—your home and everything else life has to offer.