Follow The Money – Who gets which transaction?

Category: First Time Buyer,

We get asked quite a bit about deposits and about the “money timeline.” In other words… our borrowers are interested in knowing when deposit moneys needs to change hands, who receives the deposit, and how it works in the grand scheme of the mortgage process.

*Please remember that your deposit and down payment must be trackable for up to 90 days (30 days for a few cases) through bank statements. Any moneys deposited into your account must have explanations. Please ask Parmdeep Minhas if you have any questions here. 

There are really two dates that are important when it comes to money!

Date 1: Your Subject Removal 

(or offer date if your offer is subject free)

This is when your deposit must be furnished to your Realtor. This is Point (1) below.

The deposit is usually 5% of the purchase price and this amount goes directly to your Realtor’s firm’s trust account. This money is generally provided to your Realtor in a bank draft format and your Realtor will tell you the exact wording that needs to show up on this bank draft.

The Deposit is used to secure your purchase.

Date 2: Your Completion Date

This is the date that you begin to own your property. This is when all of the money required to purchase your home will be accounted for by your lawyer or notary (solicitor). 

On this date, three things happen with regards to your money:

  1. Your Realtor’s firm send your solicitor the deposit funds. Point (2)
  2. You have to bring the remaining down payment to your solicitor (if applicable – happens a day or two prior to your completion date). Point (3)
  3. Your lender will provide your solicitor with the mortgage funds. Point (4)

The solicitor will put the money into one big pot Point (5) and pay all costs associates with your file (remember, your Realtor’s commission comes out of there seller’s side). 

The breakdown of all of the money is provided to you in something called a Statement of Adjustments. We will go over a sample statement of adjustments with you at your signing meeting with us.

Mortgages can seem daunting. Please don’t ever hesitate to contact me if you have any questions. 

Warmest Regards,

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