Posted by Ed Copp (OH) on December 02, 2000 at 14:20:05:
Tom,
It is about the same in both countries, since the laws in both countries are pretty much based on old English common law.
When you are in the process of attempting to get the lender to believe something that is not true (that you have given payment to the seller when you did not), you are attempting to defraud the lender. This is a “no,no” in both countries (and is sometimes done successfully anyway).
If everybody told the truth then the banks would not have to check anything at all. This is not going to happen any time soon. So don’t get into the position where the bank thinks that you are attempting to defraud them.
I’m from Canada and I’m not sure if the same thing goes here as in the states. However, my question is do I have to prove to the bank that’s going to hold my 1st mortgage that I have a DOWNPAYMENT by holding it in escrow or a trust account or can I just give the vendor a promisory note to make it seem like I have a downpayment and then have the vtb afterwards?
I’m new to REI and have no cash or good credit and would appreciate any advice.
Don’t know about Canada, but most, if not all banks or other conventional lenders require PROOF of funds to be used as down payment money. If the money is to come from “other sources” they want to know “who, when and why”. Lenders are funny that way, they want to make sure that you have something to lose too.