Last week, we wrote about the 5 factors lenders consider when they receive a mortgage application. We thought we would continue along the same path this week with a summary of what your lender will need from you once you decide to move forward with your mortgage. Your Broker will collect these documents and submit them to the lender on your behalf.
Proof of Income
Proving your income is different based on whether you are paid hourly, by salary, commission or if you are self-employed.
Please note: Both your paystub and your letter of employment must be current, and your letter must contain your start date, job title as well as your income information.
What a lender will need from you is dependent on where you are getting your down payment from.
If you are using savings/investments:
- Your lender will ask for 3 months of statements for the applicable account(s).
- The statements must include your account number and name to confirm ownership of the account.
- For investments, the account must be a minimum of 90 days old and must contain non-borrowed funds.
If someone is gifting you your down payment:
- That person must be a family member (parent, sibling, grandparent, aunt/uncle, etc.). Lenders usually do not allow gifted down payments to come from non-relatives.
- They must provide a gift letter and you will be required to show that the funds have been deposited into your account.
Additional documentation that is generally required for mortgage applications includes:
- A Void cheque/PAD form so your lender will know where to take your mortgage payments from
- The MLS listing and your “offer to purchase” for your new home
- A copy of your photo ID
- The name and contact information of the lawyer you are using for the transaction; and
- If applicable, your current homes:
- Property tax assessment
- Appraisal; and/or
- The offer to purchase from the buyers of your current home
The documentation process can feel overwhelming at times. One of the benefits of becoming an Innovative client is that we have a whole team of administrative staff standing behind your Broker to assist you. From NOAs to Property Tax Assessments, we are here to help you collect the necessary documentation and submit it on your behalf so you can avoid the frustration of going back and forth with your bank. Your Broker is trained to review each document to ensure your lender is getting exactly what they need to move forward with your mortgage approval.
*Please note that this is a general overview and required documentation can be highly dependent on your personal situation.