When you’re looking to secure a mortgage in Canada, understanding the required documentation is crucial. This paperwork not only helps lenders assess your eligibility but also determines the terms of your mortgage.

Let’s break down the documents you’ll need for various types of mortgages in Canada.

Basic Documents Needed for All Mortgages

No matter what type of mortgage you’re applying for, there are some standard documents you’ll always need.

Proof of Identity: You’ll need government-issued photo identification, like passport or a driver’s license to verify your identity.

Proof of Income: This can include pay stubs, or recent bank statements showing regular income deposits.

Credit Report: Most of the Lenders will go through your credit report to assess your creditworthiness. This report gives them an overview of your credit history and current credit status.

Down Payment Confirmation: You’ll need to show proof that you have enough funds for the down payment. This can be in the form of bank statements or investment account summaries.

First-Time Home Buyer Mortgage

First-time home buyers might find the process daunting, but knowing what documents to prepare can ease the stress.

Proof of Employment: A letter from your employer stating your position, length of employment, and CTC is often required.

Tax Returns: Lenders may request your tax returns from the past two years to verify your income stability.

Rental History: Some lenders might want to see your rental history to ensure you’ve been reliable with your housing payments.

Self-Employed Mortgage

Self-employed individuals face different challenges when applying for a mortgage. Here’s what you’ll need.

Business License or Articles of Incorporation: These documents prove the legitimacy of your business.

Financial Statements: Provide financial statements for your business, usually for the past two years, to show its profitability and stability.

Notice of Assessment: Your Notice of Assessment from the CRA is crucial as it verifies your income.

Investment Property Mortgage

When you’re looking to buy an investment property, the documentation differs slightly.

Rental Income Documentation: You’ll need to provide current lease agreements and proof of rental income.

Property Appraisal: A property appraisal will be required to determine the value of the property.

Lease Agreements

Showing lease agreements helps prove the income potential of the property.

Refinancing Mortgage

Refinancing is the process of replacing your existing mortgage with a new one, often to get better terms.

Current Mortgage Statement: You need to provide your current mortgage statement to show your current loan balance and payment history.

Home Appraisal: A new appraisal might be required to assess the current market value of your home.

Proof of Income: Again, proof of your current income is necessary to show you can afford the new loan terms.

Newcomers to Canada Mortgage

Newcomers face different hurdles but can still secure a mortgage with the right documents.

Proof of Permanent Residence: You’ll need to provide proof of your PR status in Canada.

International Credit Report: If you don’t have a Canadian credit history, an international credit report can help establish your creditworthiness.

Employment Letter: A letter from your employer in Canada stating your position and salary will be required.

Alternative Documentation for Unique Situations

Sometimes, unique situations call for alternative documentation.

Gifted Down Payment: If your down payment is a gift, a letter from the donor stating that the money doesn’t need to be repaid is necessary.

Support Payments: If you receive or pay support payments, providing this documentation can impact your mortgage application.

Bankruptcy Documentation: If you’ve declared bankruptcy in the past, documentation showing discharge and your current financial status will be needed.

Conclusion

Securing a mortgage in Canada involves some paperwork, but being prepared can make the process smoother. Gather the right documents required to ensure a seamless application process.

FAQs

What if I have a low credit score?

Having a low credit score doesn’t disqualify you from getting a mortgage. Some private lenders offer mortgage for the people have less-than-perfect credit.

How long does the mortgage approval process take?

The approval process can take anywhere from a few days to a few weeks, depending on the complexity of your application and the responsiveness of your documentation.

Can I apply for a mortgage without a permanent job?

Yes, but it might be more challenging. Lenders typically look for stable and predictable income, but there are options for those with non-traditional employment situations.

Are there special programs for first-time buyers in Canada?

Yes, there are several programs, including the First-Time Home Buyer Incentive and various provincial grants and rebates designed to make homeownership more accessible.