Posted by: islamicfinancingnews | February 5, 2013

Islamic mortgages and confirming your down payment

islam-8 Confirming both the amount and the source of an adequate down payment is one of the things you’ll need to do to qualify for a mortgage to purchase a home, including Riba free Islamic mortgages.

In most cases, a minimum down payment comes from your own savings. Here, you’ll need to produce about three months of bank statements to prove these funds exist and can be traced to your own account number. Similarly, three months of the most recent investment statements in your name will need to be produced when your down payment comes from investment sources such as an RSP, GIC or stocks and bonds.

In the case of a down payment that is gifted by a family member, you’ll need to provide your lender with a copy of the gift letter and a bank statement verifying the funds have been deposited into your account. Finally, the lender will need to see a copy of the completed Agreement of Purchase and Sale and your current mortgage statement when the down payment for a new house is coming from the sale proceeds of your existing home.

Understanding the source of these funds is one of the things your lender needs to do in order to approve your application for Islamic loans and help get you on your way to responsible home ownership.

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