Meeting with your mortgage broker for the first time

If you’ve set up a meeting with a mortgage broker, you’re probably wondering what information or paperwork you’ll need. I often get asked what documents are needed for a mortgage application or mortgage pre-approval, or even a mortgage planning session, regardless of whether my clients are first-time homebuyers, seasoned property investors, or in between. Every mortgage professional is a little bit different, but I like my clients to bring as much information as possible, if they have it handy, so that we have some concrete facts which we can focus on during our discussion.

Documents needed for mortgage application or pre-approval in Canada

It’s totally fine if people don’t have all of these documents for our first get-together.  But in an ideal world, mortgage brokers would like to see details about the following three areas of your financial situation:

Documents and info about your ability to pay

Mortgage lenders are looking for information that shows them whether you:

a) are able to repay the mortgage, and

b) show a track record of reliably paying other people you’ve borrowed money from.

What this translates into, in terms of documentation, is what income you have and how it’s structured.  So, again in an ideal world, what we need is:

1.  If you receive full-time, salaried income:

• one or two of your most recent pay slips, and
• your T4 for the most recent year.  If it’s January, the last pay slip of the most recent year will have the same numbers as the T4, so bring that instead, and
• a letter of employment from your company, which states your start date, current title and salary.  Note that this will need to be current-dated, so if you’re not getting the mortgage imminently, and don’t already have this, hold off on getting it.

2.  If you receive part-time income, receive commission or bonus income, or you’re self-employed:

• your last two years’ Notice of Assessment documents from Canada Revenue Agency
• plus, if you receive pay slips, add the items in # 1, above

3. If you’re in business for yourself, or receiving commission income, and you write off a substantial amount of your income:

(For example, you’re a real estate agent whose gross earnings are $100,000, but after all your write-offs your net income on Line 150 on your tax return is $50,000)

• your last two years’ full income tax returns or “T1 General”s, including your statement of business activities or statement of professional activities
• if applicable, your corporate financial statements for the last two years
• plus, if you receive pay slips, add the items in # 1, above

Information about your credit

• if you’ve checked your credit score and obtained a credit report (which I highly recommend that you do once or twice a year), please bring a copy
• if you have been discharged from bankruptcy, have paid off or are currently in a consumer proposal, have collections you’ve paid out, or have any other documentation pertaining to your financial obligations, any documents that pertain to this are useful also

Information about the property you’re purchasing or re-financing

Mortgage lenders of course are also concerned with the property that secures their mortgage loan.  So documents that pertain to the property are also important.

1.  If you’re purchasing your first home or investment property:

• MLS listings of any properties you’re thinking of buying
• if applicable, your accepted Offer To Purchase on the specific property you want to buy, together with any waivers of conditions

2.  If you already own a property – or properties – that you’re planning to re-finance or are planning to continue to own:

• your most recent tax bill and property assessment (e.g. in Toronto it would be your MPAC assessment)
• your most recent mortgage statement(s)
• your most recent HELOC (home equity line of credit) statements(s)
• if applicable, an income & expense statement on your rental property or properties
• if applicable, copies of leases for any rental units in your properties

Information about your down payment

Last but not least, mortgage companies need to know where your down payment is coming from (and your closing costs too!).

• copies of statements for your bank account(s)
• copies of statements for your RRSP(s)
• copies of statements for your investment account(s)
• if part of your down payment will be a gift from an immediate family member, make a note of this
• if part of your down payment will be an advance on a HELOC secured by an existing property, make a note of this

That’s it!  Again, not everyone has all these documents handy, and so these are not an absolute necessity for our first meeting.  But the more information you can pull together now, the easier it is to start putting together your mortgage plan, and the smoother the whole process will be.  Always a good thing!

Want to learn more?

If you are interested in exploring some of these topics further, I invite you to check out my blog. Or if you would like to talk about your specific situation, please don’t hesitate to get in touch with me.

Documents needed for mortgage pre-approval canada

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