Collecting and submitting your mortgage documents can be an overwhelming and daunting task. That’s why we have dedicated team members to provide guidance and help you find and submit the correct documents to your lender. But why are all of these documents required?
Initially, a complete document package helps your broker better understand how to structure your application so you receive the maximum benefit from your mortgage. Once your application has been submitted, your broker will also send these documents to your lender to help them fully approve your mortgage financing. These documents are required by the lender to help determine how much financing you’re able to qualify for, and to mitigate their own risk in lending you funds. Simply put, your mortgage cannot be fully approved until your lender receives and accepts your complete document package.
Employment and Income Documents
If you are paid a salary or an hourly wage, your broker will request a letter of employment and recent pay stub from you. This is to help confirm your employment type, history, and show that the income from your pay stubs matches what is set out in your job letter. If your hours are not guaranteed, the lender will also want to see your last two years T4’s to confirm what you typically make annually at your job.
If you are self-employed, the income documents you will need to provide are different and are dependent on the type of business you own (sole proprietorship or a corporation) as well as how you pay yourself. If you are a sole proprietor, the lender will want to see your most recent two years of T1 Generals (Tax Returns) & Notice of Assessments. If you are incorporated, they will also require your T4 (if you pay yourself a salary), company financial statements (if you pay yourself in dividends) or both if you do a combination of the two. These documents provide your lender with a two-year history on your financial situation, and help show the stability of your self-employment income.
Not sure what all these tax documents mean? Check out our blog to learn more about the difference between your NOAs, T4s and T1 Generals.
If your down payment is coming from your own savings or investments, lenders have to see where your down payment has come from, and that they can verify the source of these funds by reviewing the account(s) they are in for the past 90 days. This helps confirm that your down payment is not coming from a borrowed or unverifiable source.
TIP: Redacting information will cause your lender to reject your bank statements. They need to see your name and account number to confirm account ownership.
There can be many other sources for down payment - such as a gift or the proceeds of the sale on a home you currently own. If your down payment is coming from a source other than your own savings or investments, your brokerage assistant will advise you on what you need to provide as those documents can vary from lender to lender.
If you currently own one or more properties, your lender will need to see documents such as recent mortgage or HELOC statements, property tax bills and confirmation of condo fees so they can properly calculate all the expenses involved with the other properties you own. If you own rental properties, they will also need to see current rental agreements so they can calculate the income you receive from this source.
Your broker and/or lender will also request the following:
- Innovative Mortgage Forms - your mortgage application cannot be submitted to a lender until these forms have been received by our office.
- Photo ID - Government issued identification helps verify your identity and mitigate the risk of identity theft. They also help confirm details like your date of birth that are required for your mortgage application.
Questions about what documents you’ll need to provide? We can help! Comment below or call into our office at 780-416-1085 to speak to one of our dedicated document experts.