Documents required to get the best mortgage rate
Buying a house is both an exciting and stressful process. There are many steps to getting approved for a mortgage and even more paperwork that comes with it. Save yourself from worrying and follow this guideline so that you can feel assured that you have everything you need during the home buying process.
This part is not technically part of the process; it is instead more of a marketing tool. Online calculators and instant pre-approval applications with low mortgage rates allow banks and lenders to advertise their mortgage business. This does not mean that pre-approval is useless though. Most lenders will let you lock in the advertised rate for 30 to 90 days, giving you time to make up your mind. That being said, there is no guarantee that you will get that rate until you find a home. A lender will not go through with paperwork until you have made an offer on a properly. That is because a mortgage application is as much an assessment on you as it is on the property being purchased.
You will want to find a mortgage lender who can review your paperwork during the pre-approval stage if you have high debt, are self-employed or are a real estate investor with several properties already. That way you will not be scrambling to get everything together during the financing stage of the mortgage approval process.
Once you have found the perfect home and your offer has been accepted, you can seal the deal with your lender. This is the point you will have to get all of your paperwork together. This includes:
- Personal information – Age, marital status, ages and number of kids
- Employment details – Proof of income such as T4 slips or copies of your latest pay stubs, income tax returns, Notice of Assessments, and a letter from your company stating your position, salary, and length of tenure. If you are self-employed you will need to provide incorporation documents (if applicable), financial statements for the past two to three tax years, Notice of Assessments for yourself and the corporation, and the lender may want to see portions of your General Ledger or Profit & Loss statements
- Other sources of income – Documents about rental income, pension, part-time work, etc.
- Other property – The mortgage statement on other properties you currently own and a copy of last year’s property tax
- Current banking information – balances, accounts, branch, and bank documents
- Down payment verification – A print out of the account where the money is sitting, or a letter from the person giving you the money as a gift or loan
- Credit history report consent – Lenders will verbally or in writing as permission to obtain your Social Insurance Number to pull your credit history
- List of debt – Your credit history shows all outstanding debt, so there is no sense in hiding any. This documentation shows your lender how much you pay each month back into your debt
- The listing – A copy of the MLS listing
- Purchase proof – Known as the Agreement to Purchase and Sale, it is a thick document that has the address, deposit, and what is included in the price
- Condo documents – The condo corporation’s status certificates and financial statements if you are buying a condo
- Rural homes – If the property is not on the municipal sewer and water, you will need to have a certificate for the septic tank or well on the premises
Consider gathering these documents ahead of finding a property to cut down on stress.