What Documents Do I Need To Provide When I Apply For A Mortgage?
How exciting! You’ve found a place you like and you put an offer in. Your realtor just called you – they accepted your offer! Now you need to apply for a Canada Mortgage. For those of you who have mortgage pre-approval, this part is quite simple.
Let’s review the documents you should get together when it’s time to apply for a Canada Mortgage.
Proof of Employment
Hourly and Salaried Employees
If you work in a “regular” job, providing proof of employment is straightforward. Most lenders will accept a signed letter from your employer, preferably on company letterhead, that confirms your salary or hourly wage, length of time at the job, as well as your title or position. Overtime may be accepted in some cases. Some lenders will also accept a current pay stub in place of a letter, provided that it shows your rate of pay, the pay period, your gross and net pay and any deductions that come off each pay day. If you have worked at your current job for less than two years, you may need to confirm your previous employment too. Each lender has different requirements, so it’s best to check with them. Mortgages are also available for those who earn their living in other ways, such as self-employed individuals.
Commissioned Employees
As the income of commissioned employees can vary tremendously from pay period to pay period, you must supply additional documentation. Mortgages are still available for those who can obtain a letter from their employer that outlines the terms of the commission paid and how long you have worked with them, along with a pay stub with year-to-date earnings and proof of the past two years’ income. Copies of Canada Revenue Agency’s Notice of Assessment or T4s are normally sufficient.
Sole Proprietorship or Partnership
Being self-employed does not restrict you from obtaining a mortgage. Lenders require at least two years of professionally prepared financial statements to verify your income, along with T1 Generals and the associated schedules filed with the Canada Revenue Agency. Your Notice of Assessment is often acceptable too. Your income is normally calculated as the average of your net income over two years.
Other Income
There are countless others ways that people earn income. Some own rental properties, some are on pensions, and some receive child support. The application process is all about providing reliable, written proof that you earn the money that you claim you do. Be sure to talk to a qualified mortgage professional. They will tell you exactly what is required in each case for each particular lender.
Purchase Documents
Proof of Down Payment
If your down payment is a gift, you will need a letter from the donor confirming that the money is not a loan.
Pre-Approval Documents If you were wise enough to get pre-approval, you already have an interest rate locked in and the rest is simple. Just bring your pre-approval document with you.
Property Documents All buyers will also need to bring the following information with them when they apply for a Canada Mortgage:
- A copy of the accepted Purchase and Sale Agreement
- A copy of the listing sheet
- Condominium declaration, by-laws and most recent budget, if applicable
- The address of the property, including the legal description and postal code
- Your lawyer’s, builder’s and realtor’s names, addresses, postal codes, telephones, fax numbers and email addresses, as well as the contact information of the seller, if applicable
- Heating costs and property tax estimates
Banking Information Don’t forget to bring along your banking information, including account numbers, transit numbers and contact information. Those with pre-approval will whizz through this last bit, because all of their documentation has already been checked and confirmed. They just need to provide information about the sale and the property. Whenever possible, visit a qualified mortgage specialist for pre-approval. No one wants to face approval problems when an offer is sitting on the table. It’s best to get most of the paperwork out of the way, so that when you are ready to buy, things go smoothly and there are no surprises.
Have questions about what paperwork will be needed to apply for a Canada Mortgage? Lastly, Contact us here to and speak to one of our mortgage professionals today.