Acceptable Sources of Down Payments
A Down Payment may come from a variety of sources, including:
The first source, savings, is pretty straight-forward. The lender will want to see a 90 day history of your savings to ensure that the money you are using for your down payment is coming from your own resources (earnings) and that you will not have to pay anyone back. This can usually be proven through bank statements.
If you are transferring your mortgage or refinancing, you can use the equity in your home as a down payment.
A gifted down payment must come from an immediate family member. The bank will want to see a signed agreement between you and the family member stating that the family member is giving you the money and he/she does not expect you to pay him/her back. The gift letter should also include the full name, contact information and relationship of the donor.
First-Time Home Buyers' Guide
Buying a Home - in 7 Easy Steps
Your Down Payment
Mortgage Default Insurance
Free Annual Mortgage Review
Using your Equity
What is Home Equity?
Equity Lending (Private Financing)