Your mortgage broker or lender requires certain information before they can approve you for a housing loan. Use this list to make sure you bring everything you need with you when applying for a mortgage.
The Importance of Being Prepared
The most common reason for delays in getting approved for a mortgage is missing or incomplete information. As a home buyer, the best way to make sure your mortgage or pre-qualification application is processed as quickly and accurately as possible, is to bring all the information you need with you when you meet with your mortgage agent.
What Do You Need to Bring With You?
- Several pieces of government-issued identification, preferably those including a photo.
- Your current address and at least two previous addresses (as applicable).
- If you’re renting, a letter from your landlord confirming your rent history.
- The name and address of your current employer and past employers (as applicable).
- Proof of employment, including pay stubs or other proof of income (salary, commission, pension, etc.), your position with your current employer and past employers depending on how long you’ve been working there. Other useful documents include a T4 or, if you are self-employed, Notices of Assessment (NOA) for the previous two years.
- Proof of a down payment and where your down payment will come from (e.g. savings account, RRSP, sale of another property, gift, etc.). If a family member will be paying for a portion of your down payment, you will also need a signed letter from them acknowledging the purpose of the gift, and that it is non-repayable.
- Recent financial statements for the past several months (bank accounts, investment statements, sale of previous property if applicable, etc.) to show your down payment as well as the contact information for your bank.
- Your current debts and other financial obligations (including credit card balances and limits, car loans or leases, student loans, personal loans, lines of credit, child support or alimony payments, other mortgage loans, etc.).
- Information about the property you are looking to purchase, including a copy of the MLS listing, a signed Offer to Purchase, cancelled deposit checks, copies of previous appraisals, building specifications, current property tax statements, heating costs and condominium fees (if applicable) once you have made an offer on a home.
Talk to Your Mortgage Agent
Not all lenders have the same requirements. So talk to your mortgage agent before you meet with them, and ask them what they’d like you to bring to your initial interview.
Once you know what kind of mortgage you want and the price of the house you can afford, you should add up all of the other costs involved in buying a house so that you know the true cost of buying your home. When you buy a house, it isn’t only the cost of the house that you need to save for.
Don’t forget these other costs:
Appraisal Fee
An appraisal is an estimate of the value of the home. Your bank or credit union may require that the property be appraised at your expense. This can range between $250 and $350.
Deposit
A deposit is required to ensure that the buyer is serious about purchasing the home. It can form part of your down payment, but it must be paid when you make the Offer to Purchase.
Down Payment
You will need a down payment (money paid up front) to obtain a mortgage. With a down payment of 20 per cent or more of the home’s price, you can obtain a conventional mortgage. Your down payment must be at least five per cent of a home’s price for you to benefit from a competitive interest rate.
Mortgage Loan Insurance Premium
If you have less than a 20 per cent down payment, your bank or credit union may require that you buy mortgage loan insurance. You can add the mortgage insurance premium to your mortgage or pay the full amount when you close the sale on the house.
Home Inspection Fee
A home inspection, which costs around $500, is a report on the condition of your home. You may want to make your inspection a condition of your Offer to Purchase, to make sure you are aware of the condition of the house before you agree to buy.
Estoppel Certificate Fee (not applicable in Quebec)
This fee costs up to $100, but applies only if you are buying a condominium in a strata unit or condominium and costs up to $100.
Land Registration Fee
This is charged in some provinces and territories, and while the charge varies depending on the province, it is usually a percentage of the home’s price.
Prepaid Property Taxes and/or Utility Bills
These charges are meant to reimburse the person who is selling the house for amounts already paid for, such as property taxes, filling the oil tank, etc.
Property Insurance
The insurance covers the cost of replacing the structure of your home and its contents. Property insurance must be in place on the day you close the sale.
Survey or Certificate of Location Cost
The bank or credit union may ask for an up-to-date survey or certificate of location prior to finalizing the mortgage loan. This can range in price from $1,000 to $2,000.
Legal Fees
These fees must be paid when the sale is completed and costs a minimum of $500.
Title Insurance
Your bank or credit union, or lawyer/notary, may suggest insurance to cover any loss caused by problems in the ownership of the property.
Water Tests
If the home has a well, you will want to test the quality of the water to ensure supply is adequate and the water is drinkable.
Septic Tank
If the house has a septic tank, you will want to have it inspected to make sure it is in good working order.
Other Costs to Consider
Appliances
Gardening expenses
Snow-clearing equipment
Window coverings
Decorating materials
Hand tools
Moving expenses
Renovations or repairs
Service hook-up fees
Condominium fees
