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What to bring when applying for a mortgage
By Riki Unrau
So you’ve made an offer on a home and now you are going to need some money to pay for it. Unless, of course, you’re one of those rare unicorns who has been saving up since you were 12. But for the rest of us here is what you need to know to save time when applying for a mortgage.
Employment Verification
This is where lenders want to know your life story so be prepared to bring everything but the kitchen sink (Well, maybe bring the sink just in case). Standard documentation includes your last two years of Notice of Assessments, last two years of T4s, most recent pay stub and a job letter from your employer. If you are self-employed be sure to bring your documents of incorporation, T1 Generals and anything else you have to prove income.
Down Payment
For every mortgage you will need to have a minimum of a five per cent down payment. This can come from RRSPs (if you are a first time home buyer), savings, gift from family, home equity on a current property and many other places. Wherever it is coming from you will need to provide as much information as possible. If it is a gift then you will need a gift letter. If it is from savings or another account you will need a 90-day history statement.
Property Information
If you are going through a realtor then he/she will make up a contract between yourself and the seller. You will need to have this contract forwarded to your mortgage broker by your realtor. Or, if you have a copy, you can bring it in. If you are purchasing via private sale then you and the seller will need to work out your own contact and have it notarized. Then you must bring that in to your mortgage broker.
Closing Costs
The standard rule of practice is that you should set between 1.5% – 2% aside for closing costs. Most lenders will want to be sure you have this money before they lend you anything. You will need to provide a 90 statement showing the money in your account to be used towards closing costs. If you’ve transferred money into the account recently that is not a big deal. Just show a statement from the account you transferred from. When in doubt follow the paper trail!
When you come bearing a full document package, not only will your mortgage broker love you for it, but your application will go through much quicker. And when you are waiting on pins and needles to see if you are approved this will be a very, very good thing.
– Riki Unrau is a Mortgage Broker with CENTUM Homeward Mortgage Group Ltd.
