Checklist of Documents Needed for a Mortgage in Canada

Buying a new home is always an exciting time, but it can also become stressful.

While there are many things to think about, your mortgage application is one of the most important things to think about.

A mortgage requires a lot of documents. So you need to gather all the necessary documents for a mortgage in Canada before you make an appointment with a broker.

In this guide to applying for a mortgage loan, we’ll cover all the requirements and give some tips to make sure you get the best deal for your future home.

Checklist for Mortgage Documents

It is important to have all the documents ready before you meet with a mortgage broker.

While a mortgage broker will not deny you a mortgage simply because you don’t know the procedures, it does simplify the entire application. 

You will need to gather the following documents:

  • Employment verification
  • Personal finance overview (assets and liabilities)
  • Proof of down payment
  • Listing of the property you wish to buy
  • Details regarding your current home or owned properties (if applicable)

Mortgage Document: A Breakdown

Employment or Income Documents

Even if you do not have a job or a steady income, it is still possible to get a mortgage. All you need to do is show evidence that your income can cover the monthly payments. Check out our mortgage calculator to calculate your monthly payment!

However, if you have a regular income with a permanent job, the process is easier. First, you need to provide evidence of your income, such as pay stubs, electronic transactions, a Notice of Assessment of previous years, and any previous employment.

Additionally, be prepared to provide the following:

  • T1 tax form
  • T4A or T4
  • Letter of employment

If you are self-employed, you will need to show two years’ records. Moreover, if you have a passive income from other sources, you will also need to provide evidence of that.

Personal Finance Documents

Next, you will need to gather documents of your personal finances. This will include a list of all assets and liabilities. 

Assets can include other investments, such as rental properties, savings, or your personal bank account. Liabilities, on the other hand, include items such as debts, credit cards, loans or other mortgages.

Typically, if your net worth is balanced, you will have a good chance of approval. To calculate your net worth, add up your assets and subtract them by your liabilities. 

A bank or a broker will consider these items by looking at your bank account and evaluating the rest of your assets. 

Assets can also include vehicles, art, collectibles, and more. 

Down Payment Documents

When applying for a mortgage, it is important to know that you will also have to put some money down. While you may qualify for the first-time buyer category, which requires only 5%, the typical down payment for a residential mortgage is 15-20%.

It is important to note that the lender will evaluate the house and cover a portion of it, in this case, 80-85% of the value. This means that if a home is sold above asking, which recently has become the case, you will have to cover a more significant portion of the price. 

The documents you need to provide are:

  • Savings or investments from the last 90 days
  • Copy of the sale agreement
  • Gift letter
  • Withdrawal from RRSPs

To sum up, you will need to provide proof of how you plan to pay the down payment. 

Property Documents

Finally, you will need to provide documents of the property you are buying. We touched on this briefly above when we discussed the down payment.

While the bank or broker will typically do their own assessment, you will need to provide the following items:

  • Real estate listing
  • Accepted purchase and sale agreement
  • Full address
  • Legal description
  • Property tax estimates
  • Estimated utility costs, including condo fees
  • Relevant certificates (furnace, septic, well)
  • Lawyer’s information
  • Rentals, if applicable (water heater, softener, etc.)

If you are applying for a refinance, it is important to note that certain items are omitted, such as sale agreement, real estate listing, and recent mortgage statements.

On the other hand, if you are buying a new home and providing a down payment through the sale of your old home, you will need to provide the agreement of purchase and sale of your current property as well. 

Quick Mortgage Tips

Getting a mortgage in Canada is a lot of work. However, if you do it right, you can ensure that you get the home of your dreams.

To get better rates, you need to improve your credit score, minimize your debt and save for a large down payment.

If you are planning to buy a home, prepare well in advance. Most homeowners start planning 2 to 3 years ahead of time. 

A broker or bank usually looks for a steady income. So if you are considering buying a home and you are, for example, self-employed, finding a regular client will be very helpful. 

Finally, don’t be afraid to compare prices. When working with a reputable mortgage broker, you increase your chance of getting the most competitive rates and conditions. With our extensive network of brokers, you may be able to get a better deal elsewhere. 

Looking for Mortgage Experts ? 

Now that you have your checklist and know what documents are required to obtain a mortgage in Canada, you can start preparing ! Looking for professional mortgage advice?  Contact us today to see how we can help you ! We are experts in the field and can connect you with a broker in your area!