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Applying for a mortgage can seem like a daunting process, but being prepared with the right documentation can make it much smoother. Whether you’re a first-time homebuyer or looking to refinance, having your paperwork in order is crucial. Here’s a comprehensive guide to the documents you need to qualify for a mortgage in Canada.
Proof of Identity
Lenders need to verify your identity to ensure that you are who you say you are. You will typically need:
Government-issued photo ID: Such as a driver’s license or passport.
Social Insurance Number (SIN): This is required for credit checks and other verification processes.
Proof of Income
Your income is a key factor in determining your ability to repay the mortgage. The required documents include:
Employment Letter: A letter from your employer stating your position, length of employment, and salary as proof of your stable income.
Pay Stubs: Recent pay stubs, usually dated within 30 days.
T-Slips from Income Generation: This can be employment income (T4), pension or retirement income (T4A), employment insurance (T4E), or investment income (T5).
T1 General Tax Form: Your complete tax returns from the last two years.
Notice of Assessment (NOA): The CRA document that confirms your tax filings and any taxes owed or refunded.
If you are self-employed, you will need additional documents:
Business Financial Statements: For the past two to three years.
Articles of Incorporation: Shows who the shareholders are.
T1 General Tax Forms and NOAs: For the last two years.
Business License: For the last two years.
Proof of Assets
Lenders will want to see that you have enough assets to cover your down payment and any closing costs. This can include:
Bank Statements: Recent statements from your bank accounts, typically from the past 90 days.
Investment Statements: Documents showing the value of any stocks, bonds, or other investments.
Property Details: If you own any other property, provide the mortgage statement and property tax information.
Proof of Liabilities
Lenders need a clear picture of your financial obligations. We will pull your credit bureau which will show:
Credit Card Balances
Loan Amounts: Car loans or student loans.
Line of Credit: This can be secured or unsecured lines of credit.
Property Information
When you’ve chosen a property, you’ll need documents related to it, such as:
Purchase Agreement: The agreement of purchase and sale, signed by both you and the seller.
MLS Listing: The listing of the property, which includes details about the home.
Property Disclosure Statement: This is needed in certain provinces. The Seller discloses any defects/issues that are known with the home.
Property Appraisal: In some cases, lenders may require an independent appraisal to confirm the property's value.
Additional Documentation
Depending on your situation, you might need to provide other documents:
Gift Letter: If part of your down payment is a gift from a family member, a letter stating that the money is a gift and not a loan is required.
Divorce Agreement: If applicable, this outlines any alimony or child support payments.
This is a generalized list and may be different depending on your specific mortgage application
Tips for a Smooth Application Process
Organize Your Documents: Keep all your documents in one place and ensure they are up-to-date.
Be Honest: Provide accurate information to avoid delays or complications.
Consult Your Mortgage Broker: They can provide a detailed list of required documents based on your unique situation and help you gather them.
Having the necessary proof ready can streamline the mortgage application process and improve your chances of approval. If you have any questions or need assistance with your mortgage application, feel free to reach out. As a mortgage broker, I'm here to help you every step of the way.
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