When you apply for a mortgage, you will be given a seemingly endless list of papers you need to present to the lender.
At first, it may look like an impossible mission to prepare everything that is required of you, but once you start going through the list, you will see that the paperwork required is not something that is difficult to obtain.
Today, I’ll go over some of the main documents that are required during most mortgage applications. If you’d like professional help with your mortgage from a top mortgage broker, make sure and click here.
You can expect to be asked for most, or all documents from this article.
Proof of Identity
Almost all financial transactions will require you to provide proof of identity.
This is done by providing two forms of identification. One of the forms has to be government-issued, current (not expired), and contain your photo and signature such as a Driver’s License or Passport, while the second form has to contain your name and signature.
Keep in mind that the name used on your ID forms has to match the name in all mortgage application forms.
Proof of Employment
For you to be able to make regular monthly payments for your mortgage, you would need to have a regular job that provides a regular income and will continue to do so in the foreseeable future.
To confirm your employment status the lender may require you to provide a job letter showing your employer name, the current position you’re working at, the length of your employment, monthly salary, and expected future prospects.
Proof of Income
Your income is the most critical financial aspect lenders would want to check, so the documents required from this category may vary.
You can expect to be asked for the following documents:
- Pay stubs that will show the lender how much regular income you have on a regular basis
- Tax forms containing information of your earnings in the previous year
- Notice of assessment – the Canada Revenue Agency (CRA) provides every employed person with an annual notice of assessment that has information about any outstanding tax debt.
Proof of Down Payment
Before being approved for a mortgage, you would be required to put a down payment towards the home purchase.
The lender will want to see proof of your ability to pay the requested amount and where the money for the down payment came from.
The documents that will be required for this can be:
- Bank statements from the past 3 months – the bank or other lending institution will want to see an official document that shows your sources of income. They will get an insight into your savings, your investment income, salary, and any other sources of income you may have.
- Sale agreement of your current home – you may have decided to sell your current home to use the money towards the down payment of your new home. If that’s the case, the proceeds of that sale should show on your bank statement and the lender will be interested in seeing the amount you’ve received.
- Copy of RRSP statements if you’re using a Home Buyer’s Plan
- Gift letter – if you’ve received the money for your down payment from a third party (family or friend) as a gift, they would need to sign a gift letter that states they won’t ask you to return the money to them. Some lenders may ask for a confirmation that the gifted amounts are in the mortgage borrowers bank account before issuing the final approval.
Personal Finance Documents
The lender will also be interested in seeing other official documents that may prove or discredit your ability to make regular mortgage repayments such as:
- A credit report – a credit report contains your credit history which includes information about your previous loans which will help the lender assess your creditworthiness.
- Documents of other assets and/or investments – everything you own is worth a certain amount, which also increases your creditworthiness. If your current income sources are depleted, you can sell your assets and use the money towards mortgage repayments.
- Pre-approval letters – if you’ve been pre-approved for a mortgage, the lender will want to see it as another proof of your creditworthiness.
Documents For the Property You’re Buying
Besides the basic documents that provide proof of your employment, income, and creditworthiness, you may be required to bring additional documents with information about the property you’re buying, including:
- The purchase and sale agreement that will give the lender information about the terms and conditions under which the sale is to be completed
- The MLS listing which will allow the lender to see how the property was being advertised and described by the seller and if that matches what is stated in the purchase and sale agreement
- A legal description of the home that contains the full address and postal code
If you feel overwhelmed by the list or confused as to what exactly the documents you need to provide are, you can always hire a mortgage agent to assist you.
They will help you fill out the application and prepare all paperwork the lender may ask of you.
We are dedicated to giving you the most helpful mortgage advice and giving you the best mortgage service, no matter what your needs are. Learn more about our company Dominion Lending Centres here.
As specialized mortgage agents, you can be sure that we have the solution for you that will take away all of the stress and get the best mortgage product for you.
Get started today by applying online – it’s free and takes less than 90 seconds. Apply here at: https://www.goodadviceforabetterlife.ca/application/