Looking for a new home? Recently purchased a property? Refinancing your current mortgage? No matter which of these categories you fall under, you are likely looking to find the right mortgage for you. But it isn’t as simple as signing a piece of paper – finding the best mortgage for you can seem like a daunting task, especially when there is a lot of pressure to do it right!
Below is a list of documents and items that you can prepare to help move your mortgage application along as smoothly as possible. Note: every lender has different requirements, so while these are the most commonly requested documents, this list may not cover all requirements. That being said, it is certainly a great starting point!
- Recent Pay Stubs
If you work as a full time, part time, or seasonal employee, you will likely be required to submit pay stubs in order to prove you are making the income that you claim you are. This is important info that your lender uses to determine if you are able to make your mortgage payments on a timely basis. You will likely need pay stubs from your most recent 2-3 pay periods.
- Letter of Employment
In order to further validate your employment, lenders ask for a letter of employment that has been signed and verified by a representative of your company. The letter should state: how long you have been employed at the company, your status (full time, temporary, etc.), and your hourly or annual salary. Ensure that the letter you submit is not more than 30 days old.
- Notice of Assessment
At the end of a tax filing, the CRA provides a NoA document to each taxpayer which documents any outstanding owed taxes. Lenders will want to see this document from the past two tax years in order to help them calculate your debt-to-income ratio.
- T1 Form
The T1 general tax form is used to determine the cumulative income that you made in the past year. This helps establish your creditworthiness for a potential lender. If you own a corporation or are self-employed, you’ll likely be asked to provide the T1 for the previous two tax years rather than just the most recent year.
- T4 and T4A Forms
The T4 and T4A tax forms show the breakdown of your income, pension, deduction, and more. This is further used to verify your income, and you should be prepared to present your forms from the most recent 2 tax years.
- Bank Account Info
You’ll need to present both your bank statements from the past 3-6 months, as well as your bank account information (a void cheque or a direct deposit form) so the lender can deposit the loan and take repayments later.
- Business License or Articles of Incorporation
If you are self-employed and own your own business, you’ll need to present your Articles of Incorporation or your Business License so that your lender can run a credit report for your business.
- Credit Report
Your lender will look at this anyway, but it is still helpful to know what your credit report looks like before you apply for a mortgage. Look over your credit report for discrepancies or wrong info, and make sure to remedy any issues before applying for a mortgage.
- List of Assets and Investments
If you have any investments or assets, your lender wants to know about them in order to establish your net worth. This includes stocks and bonds, vehicles, savings accounts, and other properties. Make sure to provide full savings and investments statements if you have accumulated any savings from your investments in the past 90 days. Lastly, if you own or part-own any additional properties, provide the full address(es) to your mortgage broker.
- RRSP Withdrawal Statement
The First-Time Home Buyer’s Plan allows Canadian first time buyers to use money from the RRSPs in order to make down payments. If you intend on taking advantage of this program, you’ll need to provide RRSP withdrawal statements to your lender.
- Agreements of Purchase and Sale
In order to submit your mortgage application, you will need to submit Agreements of Purchase and Sale for both the property you are buying, and the one you are selling (if applicable). If you are using the sale of a previous home to fund your downpayment for a new property, your lender will need that sale agreement as proof. The other agreement will be used to show the lender the exact value of the home you are buying and the downpayment required.
- Real Estate Listing
If you are purchasing a property from the market, provide your lender with the MLS listing number so that they can easily estimate property tax and utility amounts. Also be sure to include the legal address of the property, including postal code.
- Gift Letter
If a friend or family member is helping you make your down payment, your lender will provide you with a gift letter template that needs to be signed by yourself and the gifter. This letter states that the money is given as a gift and not to be repaid.
- Rent or Lease Agreements
If you own additional properties that you rent, many lenders will consider this to be additional income when calculating your debt-to-income ratio. Provide your lender with all lease agreements between yourself and your tenants so that they may take this additional income into consideration.
- Final Property Tax Bill (mortgage refinance only)
Provide your lender with your final property tax bill so they can ensure there are no taxes outstanding on the property before you refinance your mortgage.
- Recent Mortgage Statements (mortgage refinance only)
If you are refinancing your mortgage, your lender needs to confirm the remaining balance of your current mortgage, and make sure your mortgage is in good standing.
The good news is, you don’t have to figure out your mortgage on your own. Having a solid mortgage broker to guide you through the lengthy application process can save you lots of time and headaches. Once your application is complete, your broker can help tailor it to the specific bank that your application is being submitted to.