You got your pre-approval, you picked out your first home at a builder’s sales centre, and now it’s time to get your mortgage. No big deal right? Think again. Depending on your financial situation and employment, you may have to jump through some hoops.
It really shouldn’t be that surprising that getting a mortgage isn’t as easy as online ads make it seem. There are online mortgage brokers now that make it look like you can get your mortgage with a few quick clicks. Even some major banks have ads that claim they can qualify you in seconds. Once you dive into the process, it gets more complicated, mostly because of the amount of paperwork you need to provide in order to prove that you can afford to make your payments.
Here’s a list of things your mortgage lender may require:
Agreement of Purchase and Sale
This long legal document outlines all the details of your home purchase, so your lawyer will need this, too. The most important piece of information in this document for your lender is the purchase price.
Deposit cheque breakdown
Your lender may want to see proof of your deposit cheques. This can be scanned versions or even a bank statement showing the deposit(s) coming out of your account. They need this in order to confirm that you did in fact make a deposit and could afford it.
Be prepared to ask your boss for an employment letter stating your salary and confirming how long you’ve worked at the company. You will also need to provide your most recent pay stub, and potentially a year or two of Notice of Assessments from the CRA.
If you are self-employed, it’s a whole other ball game. You’ll definitely need the last two years of NOAs, your T1 Generals for two years, as well as two years of your business financials. If you’re incorporated, you’ll have to provide your articles of incorporation, along with one or two years of Notice to Readers (prepared and signed by your accountant), as well as your T2s (corporation income tax return) for the last two years.
Something to keep in mind for new construction homes is if you move in during interim occupancy, there will be some extra paperwork to supply to your lender and lawyer. You’ll need to provide any APS amendments there may have been, as well as your interim closing package, which details things like condo fees, interim occupancy fees being paid to the builder, and potentially receipt of any final deposits due upon occupancy.
If you bought new construction, the builder will likely only give you a couple weeks notice before the final closing, so you need to have all this prepared before the building registers. Ideally, you get all your documents together and shop around for a mortgage before you receive notice of final closing, then you’re ready to pull the trigger on your best option when the time comes.
We hope this list helps you prepare for closing on your new home!