A Checklist Of Documents For Mortgage Approval
At Anchor Mortgages Canada LTD., we understand that accumulating the necessary documents for a typical mortgage can be quite a challenge. Having all these documents ready and accessible can be viewed as a stressful or laborious task, but with a little preparation, you can handle your mortgage needs quickly and easily.
As experts in mortgages, we’ve created a handy checklist to help you get your mortgage approved with as little stress as possible. Follow our checklist for documents you need to have ready for a typical mortgage so that you can get back to the other important things in life.
1. Notice of assessment and T4s for the last two years
You will need to provide notice of assessments from the last two years for them to verify your tax status, especially if you are self-employed. You will also need to provide the tax department with T4’s from the last two years as proof of the total amount of income you received.
2. Letter of employment
You will need to provide a letter of employment from your employer on a company letterhead that states when you started, how much you make per hour or salary, how many guaranteed hours you work per week, etc. If you are self-employed, you will have to provide more details, most commonly your business license.
3. Two recent paystubs
This shows how much you have earned recently and may be available in paper form or as electronic versions. If you receive other types of payment, such as overtime compensation, you’ll need to produce documentation for that income as well. If you are self-employed or have other sources of income, you will need to show some kind of proof.
4. Current address with valid photo ID
You will likely have to provide federally accepted forms of photo ID, such as a driver’s license, birth certificate, or passport. This information can come from several documents, but it is necessary to prove where you live. This requirement is pretty straightforward! They will let you know if you need to get any other personal identification or information.
5. Asset and liability information
You will need to list all assets you hold on the form, as will anyone acting as a co-borrower on the application. You’ll also be asked to list the current value of each asset on the application, so you may want to check your bank balances before you start filling them out. In addition to assets, you will also need to provide information on any debts you or your co-borrower hold. This information will be used to determine your repayment ability and verifying your employment and income.
6. Current mortgage and property tax statement (if any)
Your mortgage statements detail how much you owe on your mortgage and what you’ve already paid off. This is especially important if you want to make an extra payment on your mortgage or take up another mortgage. Lenders will also want to see that your property taxes are up to date. This document helps lenders calculate your debt-to-income ratio.
7. Ninety days bank statement for the proof of down payment
Lenders use this to determine if you’ll be able to afford your monthly mortgage payments while still repaying your other debts and down payment. To calculate this, you may be asked for a ninety-day bank statement (all pages, even blank ones) to verify your income, savings balances, and source of your down payment. If there are any large and recent deposits, be prepared to explain where those funds came from.
8. Two-Years T1 General if self-employed (sole proprietor)
The T1 tax form indicates how much cumulative income the prospective borrower made in the previous year to establish their creditworthiness. If you are self-employed, you will likely be asked for your T1 General tax forms for the most recent two tax years.
9. Three-Years T2 and Financial statements if corporate
A T2 form is a taxpayer form for all Canadian corporations to file their income tax. Before approving a mortgage, lenders will consider all major financial statements of your company. The balance sheet, the income statement, and the statement of cash flow are all studied carefully to assess your company’s repayment ability. You will be asked to provide all these documents for mortgage approval.
10. Lawyer or notary information
Whether you choose to work with a notary or a lawyer, it is always important to choose someone with expertise and experience in the area you require service. If you have hired a lawyer or notary public to help with the legal process of purchasing your home, you will need to provide information about them to your lender.
11. Proof of business (Notice of article)
If you are a director or an owner of a corporation, when applying for a mortgage, you may be asked to provide proof of business to verify the tenure of your self-employment. The articles of organization are legal documents proving the ownership structure of a corporation. Tax returns and the articles of the organization also serve as proof of business documents.
12. Lease agreement for existing rental property
You can use rental income on property that you already own, as long as you can establish a history of renting it and show that it is likely to continue. You can also use projected rental income for a property you are buying or plan to convert into a rental. In either case, only a portion of the rent you collect can be used as rental income to qualify for a mortgage. You will be required to show a lease agreement to avail of this benefit.
13. CPS, MLS, PDS, and Title
You will need to do your research when it comes to the property you are interested in purchasing. Ensure that information regarding CPS, MLS, PDS, and the Title is in proper order with regards to the property or home. Most lenders need certain information about the property you are interested in buying before approving you for a mortgage to check if everything is in order, even on the seller’s end.
14. Strata documents (if applicable)
Like most legal documents, it can be a huge mistake to ignore your strata documents. These documents will help you understand what to expect from your prospective unit, the financial health of the strata corporation, and what you are or are not allowed to do inside your unit. As such, this is hugely important to your enjoyment and financial future, so it is necessary you keep this information safe.
15. Signed application and consent form
If you are using a mortgage broker or agent to find you a mortgage, once they have your approval to approach a particular lender, they will complete your application, including information about the property if you have chosen one and information about you from your meeting. You should be asked to sign a written acknowledgment that they have disclosed the risks associated with the mortgage they have presented, and you have consented to it.
If you are looking for mortgage brokers in Abbotsford, British Columbia, then reach out to us at Anchor Mortgages Canada LTD. We have the best team with long mortgage brokering and banking experience. We work with both lenders and borrowers. Our goal is to always find the creative, informative, and suitable mortgage solution for your needs and unique circumstances. Keeping your best interest in mind, we diligently work for you. We offer services like home purchase mortgages, mortgage refinances mortgage renewals, private mortgage lending, second mortgages, construction financing, commercial equipment financing, and commercial mortgages. We provide our services across Vancouver, Surrey, Delta, Langley Twp, Abbotsford, Chilliwack, Burnaby, Coquitlam, Richmond, Maple Ridge, Mission, Port Coquitlam, Ladner, White Rock, Hope, North Vancouver, New Westminster, Victoria Island, and West Vancouver. To learn more about the services we offer, please click here. To get in touch with us, please click here.