Buying a home? Congrats! Or maybe you’re refinancing your mortgage to make your mortgage work for you. Now, before you get swept away in open-house dreams or renovation plans, let’s talk paperwork. This guide will serve as your roadmap, outlining the essential documents you’ll need to navigate the mortgage process smoothly and efficiently.

While this list might look intimidating, it’s important to mention that not all of these will be needed for your mortgage approval. What is needed will vary from bank to bank based on your mortgage request and personal circumstances.

 

Establishing Your Identity and Residency

• Government-Issued ID: Show off your driver’s license, passport, or any other government-issued ID that proves your identity.
• Social Security Number: Keep your social security number handy, it’s like your financial fingerprint.
• Proof of Residence: Provide documents verifying your current address, such as utility bills, a lease agreement, or a recent bank statement.

 

Unveiling Your Financial Health

• Proof of Income: Gather your most recent pay stub and T4s from the past two years to demonstrate your income stability.
• Tax Returns: Depending on the nature of your income, lenders might ask for your most recent 2 years’ tax returns, including all schedules and
• Bank Statements: Collect statements from your checking, savings, and other bank accounts for the past few months to offer a comprehensive picture of your finances and down payment (if purchasing).
• Proof of Assets: Prepare documentation showcasing your assets, such as investment account statements, retirement account statements (RRSP, TFSA, etc.), and any other relevant asset information. This is what the banks refer to as your ‘liquid assets’ and is included in your net worth calculation.

 

Demonstrating Employment and Business Income

• Employment Verification Letter: Request an official letter from your employer confirming your position, employment status, and income details.
• Self-Employment Documentation: If you’re self-employed, gather documents verifying your business ownership and income (business license, business financials, business bank statements, and tax returns for the past two years).
• Additional Income Documentation: If you receive income from other sources, such as rental properties, investments, alimony/child support, childcare benefits, disability, etc., provide supporting documentation.

 

Property Information and Appraisal

• Purchase Agreement: Include a copy of the fully executed purchase agreement between you and the seller.
• Appraisal Report: The lender may require an appraisal report to assess the property’s value.
• Homeowner’s Insurance Information: Be prepared to provide details about the homeowner’s insurance policy you plan to secure.

 

Addressing Debts and Liabilities

• Credit Card and Line of Credit: Gather recent statements for all your unsecured debts, showing the outstanding balances and minimum monthly payments.
• Loan Statements: Include statements for any outstanding loans you have, such as student loans, car loans, personal loans, or any other debts.
• Other Outstanding Obligations: Gather relevant documentation (ex. separation agreement) confirming the amounts and payment terms if you have other financial obligations, such as alimony or child support payments.

 

Additional Documents:

Depending on your specific circumstances, you may need additional paperwork. Examples include:

• Gift Letters: For down payment or closing cost assistance from family or friends (aka ‘gifted funds’)
• Divorce or Separation Agreement: If applicable.
• Other Relevant Legal Documents: Bankruptcy or consumer proposal discharge, collection payout statements or release letters, etc.

 

Tips for Organization and Preparation:

• Dedicated Folder: Organize your documents in a designated folder or binder for easy access.
• Digital Copies: Consider creating digital copies of your documents for secure storage.
• Utilize the Checklist: Refer to this checklist throughout the process to ensure you have everything.
• Start Early: Gather documents early to avoid last-minute stress.
• Communicate with Your Broker: Maintain open communication with your mortgage broker for guidance and clarification.

 

Remember, being well-prepared with the necessary documents is crucial for a smooth and successful mortgage application. By following this guide and working closely with your lender, you’ll be well on your way to achieving your homeownership dream. Call us today for guidance and support (905) 455-5005.