I wanna buy a house

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What will I need to get a mortgage?

I often get asked what to bring to a mortgage appointment, and I usually tell my clients to bring a list of assets, liabilities, payments, and maybe grab a pay stub.  

That’s a good start, but what if you are self-employed? It would be helpful to know what your net declared income is, which you can find on your Notice of Assessment (NOA) that you get back from Canada Revenue Agency (CRA) after they have reviewed your tax return.

Most lenders will require an employment letter and pay stub dated within 30 days, so I recommend holding off until you are ready to make an offer.

If you are hourly or have recently started your job, it is a good idea to pull out your previous year’s T4s and/or your NOA from CRA for the previous year. 

For self-employed borrowers, the documentation varies between lenders, but if you have two years of T1 Generals (income tax returns) and NOAs, it is a good start.

Once you have submitted an offer on a property, ask your realtor for a copy of the MLS (multiple listing system) which provides details about the property for the lender. You will also need a copy of the accepted offer to purchase and the Property Disclosure Statement (PDS). 

The PDS is a checklist filled out by the seller of the property detailing the condition of the property, as well as any know deficiencies. It also describes the type of building materials used in construction. 

If the property is a condo, it is helpful to have a copy of the Form B, which will state any outstanding fees for the unit and any pending repairs on the building.

Another confirmation which is required for financing is for the downpayment and closing costs.  

Most lenders require that you show the downpayment and 1.5% of the purchase price for closing costs. Closing costs include legal fees, property transfer tax, property taxes due and title insurance costs.  

There are several forms of downpayment, such as savings, a gift from family, or proceeds from a sale. For savings, the lender usually requires a 90 day history of the money in your account to show it is not borrowed. If the downpayment is a gift, then a gift letter is needed stating the amount, that it is an outright gift, and the relationship of the donor. 

If the downpayment is from the sale of a property or something else, then a copy of the offer to purchase or sales agreement should be included, as well as a mortgage statement (in the case of real estate sale), to show the equity.

Prompt submission of all the paperwork will greatly speed up the time for approval, and ensure that you receive a non-conditional approval for financing.

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