When it comes to buying a new home, here is what you will need to qualify for a mortgage.
You need three things:
1. Credit (if your credit score is low, the interest rate and fees may be higher)
2. Approved income
3. Equity (The Down Payment)
#1. Qualified Credit.
If your score is below 680, there is a good chance that financing will be done with “B” or Private lenders.
#2. Approved income. For “A” Mortgage lenders.
Salaried Employees or Guaranteed Full-Time Hourly Income
Letter of Employment
Pay Stub
Possibly your most recent notice of assessment
Hourly (not guaranteed), Part-time, Commissioned, Seasonal, Overtime, Bonuses etc.
Letter of Employment
Pay Stub
Last two years T4s
Last two years' notices of assessment
Self-Employed
For “A” lenders;
Last two years T1 Generals
Last two years business notices of assessments
Last two years of business financials (possibly last 2 years of T2’s)
Articles of Incorporation (if applicable)
For “B” lenders; (with 20% or more down)
Six months of banks statements (or 12 months if income looks better annually)
Proof of business ownership for 1 or 2 years
May also require copies of contracts or receipts
Pension and Government CPP, OAS etc.
Pension via a government source such as Canada Pension Plan and/or Old Age Security, or income from a
company you were previously employed with and have since retired from.
T4A for the most recent tax year and three months' bank statements confirming automatic
deposits.
Pension statement
Canadian Child Benefit
For Children 14 and under
CCB annual statement or
most recent year T4a and bank statements confirming deposits
Proof of child’s age (birth certificate)
#3. For approved equity (The Down Payment)
Down payments can be as little as 5% down for the first $500,000 of the purchase price and an additional 10%
down for anything from $500,000 to $999,999.
You will also need to show that you have 1.5% of the purchase price set aside for closing costs.
The Down Payment can come from
The sale of an existing property
Savings
A give from an immediate family member
For savings, we will require a 90-day history of where the money is coming from (90 Days of bank statements)
* We will also need a copy of your ID. We will need a copy of the front and bank if using a driver's licence.
Thanks
* If an appraisal may be required.
These can take up to 7 days or longer to get. The cost for an appraisal is around $400.00 for an in-town
property and will often cost more for out-of-town or country properties (Commercial properties will start at
around $2,500)
Please feel free to text, call or email me anytime with any questions.
