Your Mortgage Approval Checklist:
Essential Documents for Ontario Home buyers

Securing a mortgage in Ontario is a crucial step on your path to home ownership. Being well-prepared with the right documents can make this process smoother and less stressful. Let’s dive into the essential paperwork you’ll need to gather for your mortgage application.

Proving Your Identity

The first step is confirming who you are. Lenders require a valid, government-issued photo ID. This could be:

• A driver’s license
• A passport
• A provincial photo ID card
• Ensure your ID is current and matches the name on your other documents.

Demonstrating Your Income

Lenders need to verify that you can afford your mortgage payments. The documents required depend on your employment situation:

For Salaried Employees:

• Recent pay stubs (typically from the last 30 days)
• T4 slips from the past two years
• Notice of Assessment from the Canada Revenue Agency (last two years)
• A letter from your employer confirming your job status, salary, and length of employment
  
  For Self-Employed Individuals:

• Personal income tax returns (T1 General) for the past two years
• Business financial statements for the last two years
• Notices of Assessment from the CRA for the past two years
• Proof of HST/GST payments (if applicable)

Verifying Your Down Payment

You’ll need to show where your down payment is coming from. This could include:

• Bank statements showing savings accumulation over the past 90 days
• Investment account statements (RRSPs, TFSAs, etc.)
• A gift letter if someone is contributing to your down payment
• Sale agreement of an existing property if you’re using the proceeds for the down payment
• Painting Your Financial Picture

Lenders want a comprehensive view of your financial health. Be prepared to provide:

• A list of your assets (vehicles, investments, other properties)
• Details of your liabilities (credit card balances, car loans, student loans)
• Recent bank statements (usually the last three months)
• Information about any rental properties you own

Property Details

For the home you’re planning to purchase, you’ll need:

• The signed purchase agreement
• MLS listing or property details
• Property tax assessment
• Condo fees and status certificate (if applicable)

Additional Documents for Special Situations

Depending on your circumstances, you might also need:

• Separation agreement or divorce papers (if applicable)
• Child support or alimony documentation
• Bankruptcy discharge papers (if you’ve had a past bankruptcy)

Tips for a Smooth Application Process

• Start Early: Begin gathering documents as soon as you decide to apply for a mortgage.
• Stay Organized: Create a digital folder or physical file to keep all your documents in one place.
• Be Thorough: Provide complete information to avoid delays in processing.
• Update Regularly: If you’re house-hunting for a while, keep your documents current.
• Communicate Openly: If you’re unsure about anything, ask your mortgage professional for guidance.

Understanding Ontario’s Unique Mortgage Landscape

Ontario’s real estate market has some specific considerations:

• Foreign Buyers Tax: If you’re not a Canadian citizen or permanent resident, be prepared to provide additional documentation and potentially pay a Non-Resident Speculation Tax.
• First-Time Home Buyer Incentives: Familiarize yourself with provincial and federal programs that might assist you, such as the First-Time Home Buyer’s Tax Credit.

The Role of Your Credit Score

While not a document per se, your credit score plays a crucial role in mortgage approval. Before applying:

• Check your credit report for errors
• Take steps to improve your score if needed
• Avoid applying for new credit during the mortgage process

Conclusion: Your Path to Mortgage Approval

Gathering the right documents is a critical step in your journey to home ownership in Ontario. By being prepared and organized, you’ll streamline the approval process and demonstrate to lenders that you’re a responsible borrower.

Remember, every mortgage application is unique. We may request additional documents based on your specific situation. Don’t hesitate to ask questions and seek clarification throughout the process. With this comprehensive checklist in hand, you are well-equipped to navigate the mortgage approval process. Happy house hunting!