Important documents for a mortgage application

• Common income-related documents you'll need
• Necessary down payment and property documents
• Which documents to prepare when switching to QuestMortgage

When applying for a mortgage, many Canadians are surprised at the number of documents that need to be prepared. These mortgage documents can include your financial situation, property information, down payment, and terms of the purchase and agreement of sale.

It can also vary depending on the situation and that’s why we’re here to help you prepare to make the application as quick and easy as possible. In addition, our Mortgage Advisors will be there to help, every step of the way.

The following below are some of the most common documents per income type:

Employment and income documents:

Full-time (salaried or hourly) income

Any two of the following:

• Letter of employment or Job Letter.
• Recent Pay stubs: Proof of how much you earn on a regular basis.
• Notice of Assessment (NOA): Canada Revenue Agency (CRA) provides employed people with a notice of assessment every year after their returns are submitted. (If hours are not guaranteed or less than 37 hours per week), typically for part time or temporary employment, a 2-year average of the most recent NOAs will be considered. Typically for a part time or temporary employment (i.e. if hours are not guaranteed or less than 37 hours per week), a 2-year average of the most recent NOAs will be considered.
• Most recent T4.

Please note: Typically, 2 years of employment history is needed. If it’s less than 2 years, your previous employment must be confirmed and should be in the same line of work. If it’s less than 2 years with no previous experience or coming from a new line of work, you can apply for an exception. If an exception is required, make sure you provide supporting reasons for the lack of employment history.

Part-time income

Any two of the following:

• Letter of employment
• Recent pay stubs
• Most recent T4

If hours are not guaranteed, a 2-year average of the most recent Notice of Assessments (NOA) will be considered.

Self employed / Business income (sole proprietor or incorporated)

• NOAs.
• Corresponding T1 General tax return.
• Business license or articles of incorporation confirming business ownership.
• In some cases, we would ask for some financial statements, prepared by an accountant or corporate/business tax returns.

Please note: The 2-year average will be considered to qualify. If the most recent year is lower, only the most recent year’s income will be considered.

Commission income

Any two of the following:

• Letter of employment.
• Year to date commission statement.
• 2 years of most recent T4As.
• 2 years of most recent 2-year T1 Generals using net income.
• 2 years of most recent 2-year NOAs (must be obtained if self-employed).
• Proof of Business.

Please note: The 2-year average will be considered to qualify. If the most recent year is lower, only the most recent year’s income will be considered.

Bonus, overtime, and seasonal income

• Letter of employment.
• Paystub.
• Two most recent years of either T4, NOA, or T1 General.

Please note: The 2-year average will be considered to qualify. If the most recent year is lower, only the most recent year’s income will be considered.

Maternity and paternity leave income

Letter of employment confirming:

• Employment (confirming full time salaried employment).
• Maternal or paternal leave.
• Return date, in the same position.
• Base annual salary.

Investment income

• Current investment statement(s) confirming liquidity.
• Most recent (2 years) T1 Generals or tax summary forms.
• NOAs.

Please note: Investment income is considered as income from interest and dividends. The 2-year average will be considered provided the income has been available consistently for the past 2 years. Any portion of the investments that are needed for the down payment may not be considered. If the most recent year is lower – only the most recent year’s income will be considered.

Pension income

Any one of the following:

• Pension Statement or T4A confirming allowable monthly benefit, name & address.
• Bank statements confirming regular deposits.
• Most recent T1 General or NOA.

Retirement income

Most recent Annuity, RIF, or LIF statement confirming sufficient investments to cover the term of the mortgage and any one of the following:

• Bank statement confirming direct deposit(s).
• Recent Payment stub.
• Most recent T1 General.
• Most recent T4A.

In addition to above, the most recent year’s NOA to confirm no taxes owing.

Rental income

Any one of the following:

• 2 years of most recent average of the most recent T1 Generals including the Statement of Real Estate Rentals (T776).
• 2 years of most recent average lease agreements.
• In some cases, “fair market” rents from an appraisal or comparable report may be used.

Down payment documents:

Withdrawals from your RRSP through the Home Buyer’s Plan (HBP): If you're buying your first home, you may be eligible to use money from your RRSP for your down payment through the Home Buyer's Plan.

Savings or investment statement (money should be in the account in the last 90 days).

Gift letter: This is a document signed by the borrowers and gifters (the donors who are from an immediate family member or relative) to ensure that the donors are helping the borrowers with the downpayment via a gift and not lending the money. Please ensure to also provide a bank statement showing that the gifted funds are in your (the borrower’s) account at least 15 days before the closing date of the purchase.

Deposits made with the purchase offer or deposits made to a builder: the history of funds must be provided to confirm the funds are from the borrower's own resources.

Statement of assets or investments.

Agreement of Purchase and Sale of an existing property: If you're selling your existing home, any proceeds from the sale that can be used for your down payment must be obtained.

Property documents:

Depending on the type of property you’re buying, certain documents may be needed. Our Mortgage Advisor will be able to provide a list of documents required including (not an exhaustive list):

• Copy of accepted purchase and sale agreement.
• Copy of MLS listing.
• Property’s address and legal description.

Switching to QuestMortgage documents

Switching to QuestMortgage can help you save over the term of your mortgage. When you apply from your current mortgage, some documents may be needed including:

• Property tax statement.
• Current mortgage statement.
• Property insurance policy.

Please note: Certain documents might be needed depending on the type of home you’re buying and your situation. Call us and one of our Mortgage Advisors would be happy to ensure you have all the documents required at 1-888-909-5588 or send us an email.

You don't need all of your documents to start a mortgage application, all you need is a signed offer. Start an application today and you'll get help along the way by one of our expert Mortgage Advisors. Get my rate.

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The information in this blog is for informational purposes only and should not be used or construed as real-estate, mortgage, financial or investment advice.

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