With government officials citing limited resources and a lack of funds available to conduct a proper investigation, criminals have been manipulating and taking advantage of the Canadian legal system. It is now coming to light the impact this has had on our economy, most notably our real estate market.

To crack down on this, the government implemented “sourcing the funds” for down payment used to purchase a home. The federal and provincial government require mortgage lenders collect a minimum of 30 (for uninsured mortgages) –  90 (for insured mortgages) days of transaction history for every bank account where money has originated to complete a real estate purchase.

E-transfers and transfers between accounts within a 30 – 90 day period require a history of the account in which funds were transferred from. For example, if a savings account has been reserved just for down payment and $1000 a month has been transferred into this account from a chequing/savings account, cashed in $5000 from a TFSA and deposited $3000 in cash, all before an offer was written on a home, the lender is going to request a 30- 90 day history of the savings, chequing and TFSA account, along with a history of the $3000 cash deposit.

This process may feel invasive and frustrating, rightfully so. However, due to the extreme affect money laundering has had on the economy, these rules are probably not changing. When accumulating down payment be prepared to provide a 30 – 90 day history of every account where money is coming from for down payment. This process is difficult and time consuming for the client, mortgage broker and lenders.

Be prepared! With more focus on anti money laundering, rules and regulations may become more rigid.

If you have any questions,  please feel free to contact me.

dcarlson@jencormortgage.com

403-245-3636 x 2027