The official unofficial Canadian Mortgage Document Checklist

Buying a home is an exciting and often overwhelming process. The pace is fast, and no matter if you are looking for a new home or refinancing your current mortgage, the paperwork is sometimes daunting. We thought it was time to simplify and provide you with the official, unofficial Canadian mortgage document checklist.

Although we should note that this is not an exhaustive list, and depending on your current situation, a lender may ask for more documents or less. However, this list will give you a starting point on what most, if not all, lenders will ask to see when you are looking to secure a new mortgage.

Many of these documents will be the same for those looking to remortgage, but you may not have as much documentation for the collection as those looking to secure a new mortgage.

Quick Links

1. Employment and Income Verification
2. Details on your new property
3. Down Payment

Employment and Income Verification

Lenders want to see a few things in these documents. First, they want to know that you are making money steadily and that your pay is constant throughout specific periods. They also want to ensure that you are up to date on your taxes and do not owe anything substantial to the government.

Notice of Assessment

Another CRA product, the Notice of Assessment, will showcase to the lender if you have any outstanding taxes owed to the CRA. This document will help the lender build your income to debt ratio. Expect to provide at least one, if not two, years.

T1 Tax Form

This Canada Revenue Agency (CRA) general tax form allows lenders to establish what they made last year. This will help build their validation and ensure that everything matches what you have said previously.

Recent Paystubs

Lenders will want to see pay stubs to ensure that they can validate your income so that you can pay for that monthly mortgage. Most lenders will want to see at least two weeks of pay stubs, but if you are seasonally or part-time, they may want to see more. It usually is best to chat with a mortgage broker or the lender to see exactly what they need from you if you are self-employed.

Letter of Employment

You will need a signed letter from your boss stating the following:

• Whether you are a seasonal, part-time or full-time employee

• How long you have been at the company

• Your hourly or annual salary

• Role and title at the company

You should also ensure that this letter is signed, dated and on the company letterhead. Finally, only get this letter at the last minute as lenders will typically only accept a letter of employment that is less than 30 days old.

T4 and T4A

If you are a full-time employee, you will need to provide a T4 for at least the previous year and, if not, the last two years. While if you are someone who works on commission, you will need to also add in the corresponding T4A.

Details on your new property

The lender will also need more information on the home you are purchasing!

Real Estate Listing

The lender will need either the fact sheet for the home or the MLS listing to confirm the property tax estimates, lot information, condo fees, and the heating and utility cost estimates.

Address of the Property

If the legal address, including the postal code, is not included in the real estate listing, you need to provide that here.

Accepted Purchase and Sale Agreement

Once the Purchase and Sale Agreement is signed, the lender will want to see the home’s final cost. This will help the bank determine the principal amount of the mortgage and confirm the required down payment.

Down Payment

The following section deals with the Down Payment portion of the documentation. Lenders want to see a clear link between the source of the money and the money being used for the down payment.

Savings and Investment Statements

Almost all lenders will need a copy of your savings and investments over the past 90 days. This includes your RRSP, TFSA and any other saving mechanisms that you might be using.

Agreement of purchase and sale of your existing property

If you are selling a home to move into a new one, the lender will want to see the Purchase and Sale Agreement for the property you use for the down payment.

Gift Letter

If your family or friends are gifting you a part of your down payment, you will also need to account for this. The gift letter will need to be signed by the gifter, confirming that the payment is made as a gift and is not a loan or will be repaid. You may also want to do this process for a larger inheritance, but it will depend on the specific situation.

RRSP or FHSA Withdrawals

If you are a first-time homebuyer taking advantage of the first-time home buyers’ plan, you will need to document the money you are withdrawing from your RRSP or the new First Home Savings Account (FHSA) and provide this information to the lender.

Finally, if you own other properties, the lender will need more information.

Recent mortgage statements

If you are still paying a mortgage or have a home equity line of credit, the lender will use it as part of their debt servicing calculations. The lender will also want to see that you are up to date with your mortgage payments.

Rent or Lease Agreements

If you rent out your properties as investment properties, the lender will want to see any rental or lease agreements.

The full physical address of all additional properties owned or partially owned

The lender will want to know how much of the assets and liabilities you are putting forward are in real estate.

So, as we said initially, this is not an exhaustive list, and depending on the lender and the situation, you may need to provide more or less documentation. However, lenders want to be confident that your debt-to-income ratio is within their guidelines and that you will be able to afford the mortgage. It is a pain to gather, but you will be in a good position if you can collect them in the run-up to offering on homes. Plus, if you want to get pre-approved, you will already have most of the documents ready to go!