When applying for a mortgage be prepared

Mortgage paperwork

“Why do they need that? It wasn’t like this the last time I bought a house”.

One of the common frustrations shared by mortgage applicants is the amount of paperwork required to get a mortgage.

With interest rates higher now I’m finding lenders are even more particular about what they require to approve mortgage applications. While it may seem like a tremendous amount of documentation is required, we need to step back and think about the fact we are asking a lender for hundreds of thousands of dollars.

Would you lend this amount of money to someone you barely know?

Lenders don’t ask for additional paperwork to make your life difficult. They are doing their due diligence to ensure you will be able to repay your mortgage. Under Canada’s anti-money laundering legislation and anti-terrorist financing laws, potential lenders are required to document large or suspicious deposits.

How can you make this a little more straightforward on your end? If you are getting ready to buy a home, make sure your paperwork is organized.

Process-wise, I send my clients a list up front of the documentation they will most likely need for their mortgage approval. It may seem like overkill in some cases but by being organized upfront, I am often able to have an approval within a few days or sometimes, even the same day.

Regardless of how prepared you are upfront, lenders will sometimes ask for additional information, so don’t be surprised if you are asked for even more documentation. Many lenders require verification of two years consistent employment so it is helpful to dig out T4s and Notices of Assessment from Canada Revenue Agency for the last two years.

You will need to ask your employer for a letter that outlines your salary, position and start date. You will also be asked for a current pay stub. You will need to demonstrate where your down payment is coming from. Lenders need a 90-day history, so that means you will need to provide bank statements for the last three months. It is key that the statements you provide clearly show your name and account number. D0 not scratch out the transaction list as lenders will not accept that.

If you have any large deposits during the last three months (generally over $2,000), you will also have to show a 90-day history for those funds.

If you are self-employed, you will likely require additional information. Depending on the mortgage product you are using, expect to be asked for your Notices of Assessment and complete T1 Generals for the previous two years. If you are incorporated, you will likely be asked for confirmation of that.

A mortgage broker recently used an analogy with one of his clients. The client was a tradesperson. The broker explained that, if the client didn’t have all of the materials and supplies needed he would not be able to complete his construction project. For a mortgage broker, your paperwork is the equivalent of those materials and supplies. Without the proper paperwork, we cannot get your mortgage approved.

If you are thinking about buying a home, or already out looking, the more prepared you are with your paperwork the smoother your approval will go. And your mortgage professional will be very grateful.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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About the Author

Tracy Head helps busy families get a head start on home ownership.

With today’s increasingly complicated mortgage rules, Tracy spends time getting to know her clients and helps them to better understand the mortgage process. She supports her clients before, during, and after their mortgage is in place.

Tracy works closely with her clients, offering advice and options. With access to more than 40 different lenders. She is able to assist with residential, commercial, and reverse mortgages in order to match the needs of her clients with the right mortgage package.

Tracy works hard to find the right fit for her clients and provide support for years down the road.

Call Tracy at 250-826-5857 or reach out by email [email protected]

Visit her website at www.headstartmortgages.com

Download her app: Headstart Mortgage Architects



The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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