HOW SHOULD I PREPARE FOR MY MORTGAGE APPLICATION?
When applying for a mortgage the lender is interested in 4 fundamental cornerstones of the credit application:
• Credit history and outstanding debts (if any)
• Source of the down payment funds
• Subject property that you are buying and the mortgage will be secured upon
Before even beginning to look at homes I recommend getting a few details sorted and prepared up front with a mortgage professional. Depending on the complexity of your personal circumstances this might be a cinch or it might require a little digging.
The following is a generic checklist that works as the perfect foundation in order to apply for a mortgage or pre-approval:
EMPLOYMENT & INCOME VERIFICATION:
– Copy of your latest paystub
⁃ Letter of employment from HR
⁃ Copy of most recent T4 slip
If you are self-employed or there is a variable component to your income like commission, bonuses etc then you’ll want to make sure you have the following available up front:
⁃ 2 most recent T1 General(s)
⁃ 2 most recent Notices of Assessment from CRA
⁃ OTHER INCOME: legal agreement to support spousal/child support
⁃ OTHER INCOME: rental agreement, disability or pension statements
CREDIT HISTORY & OUTSTANDING DEBTS:
⁃ When you apply for a mortgage your broker/lender will pull your credit report
⁃ If you are concerned about your credit you can pull your own report up front via http://www.consumer.equifax.ca
CONFIRMATION OF DOWN PAYMENT FUNDS:
⁃ Savings or investment statements for the last 90 days
⁃ Sale of an existing property – a copy of the sale agreement
⁃ Gift letter (templates are usually provided by lender)
INFORMATION THAT DESCRIBES THE PROPERTY YOU ARE BUYING:
Obviously there are a lot of items listed above and it can seem overwhelming or impractical to collect everything up front.
My best advice is to focus on the preparing your proof of income and down payment documents first. The rest of details will fall into place in due time.
WHY IS THIS IMPORTANT?
It’s always been important to have a pre-approval before shopping for a home but getting your ducks in a row for your financing has never been as important as in 2017.
Given the current market conditions to be successful with an offer on a home or condo you’ll have to waive your condition for financing. That’s a scary thought.
It’s critical that you consult a trusted mortgage professional before making any offers on a home who can help you navigate.
For more information, contact us and we would be happy to assist you or answer any further questions you may have.