Organizing your Mortgage Documents

There are two categories of documents that the lender will require; income and down payment. As a component of income verification the lender will need to determine whether you are employed or self employed.
If you are salaried or paid hourly, you should provide 3 pieces of information to confirm your annual income. You should have a job letter that confirms your position, income and start date, a recent pay stub and your current years T4 slip or your NOA, notice of assessment from your tax return. If you have regular overtime and annual bonuses, these can be used for qualifying purposes, but a two year average would need to be provided to confirm they happen regularly.
If you are self employed, commission paid or on contract, the lender will look to see that you have a least 2-3years in your line of work and the track record to confirm the worthiness of your business or a record of earnings. You will be asked for a recent years T1 general tax return form, NOA’s, business license, articles of incorporation and information of what your business does. Recent changes with the mortgage insurers allow the self employed to qualify with a little as 5% down from their own resources and will extend the amortization beyond 25 years if desired.
Since the lender will not have direct access to your banking information, they ask for printed statements of your accounts. Normally they need 3 months of bank statements that have your name and account number on them. If you have savings in RRSP’s or investments the lender will need your most recent quarterly statement. Gifted monies from an immediate family member is also permitted for a down payment on your new home; a gift letter and the deposited funds are also legitimate as a down payment.
Dealing with a mortgage specialist, mortgage broker, means you have access to over 30 lenders and all 3 mortgage insurance companies. Mortgage Brokers are Mortgage specialists and they deal solely in Real Estate lending, they are experts on getting people mortgage funding that suites their needs.
In most cases the mortgage broker is paid directly by the lender and as such no additional fee is incurred by the borrower, In any case all fees are required to be fully disclosed to the borrower by the mortgage broker. Mortgage specialists are also flexible with their hours and when you have a busy work schedule of your own it is nice to know that someone will be available to meet with you on evenings and weekends and in many cases in your own home.
The mortgage lending market, just like the housing market, is constantly changing. You want to make sure that you are working with a mortgage specialist and that you are well advised when choosing your next mortgage.
Thanks so much to Kevin MacGregor, Mortgage Specialist with Homes Loans Canada for helping craft this information; as usual Kevin is a resource I know I can always count on. You can contact Kevin at 403-852-2908