Do your paper work

“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 paper work required to get a mortgage.

While it may seem like a tremendous amount of documentation is required, we need to step back and think about the fact that we are asking a lender for several hundred thousand 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 that you will be able to repay your mortgage.

Under Canada’s anti-money laundering legislation and anti-terrorist financing regime, 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 paper work is organized.

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 … and sometimes even the same day.

Regardless of how prepared we are, 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, which 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. Do not scratch out the transaction list as lenders will not accept this.

If you have any large deposits during the last three months (generally more than $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.

Not too long ago, I worked with a commissioned car salesperson. We got chatting about how the financing process for buying a car is so different from a mortgage application.

My understanding is that it is fairly common for dealerships to inflate people’s income to make their applications work.

In the mortgage world this is not an option.

A mortgage broker recently used an analogy with one of his clients. The client was a trades person. 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 paper work is the equivalent of those materials and supplies.

Without the proper paper work, 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.

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About the Author

Tracy Head and Laurie Baird help busy families find mortgage solutions. Together they have more than 45 years of experience in the mortgage industry.

With today’s increasingly complicated mortgage rules, Tracy and Laurie spend time getting to know the people they work with and help them to better understand the mortgage process. They support their clients before, during, and after their mortgage is in place.

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

They work closely with their clients to find the right fit, and are around to provide support for years down the road!

Contact them at 250-862-1806 or visit http://www.okanaganmortgages.com

Visit their blog at https://www.okanaganmortgages.com/blog


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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