What to Bring to Your Mortgage Broker

May 5

When you're ready to work with a mortgage broker to get a mortgage, it's essential to come prepared with the right documentation. Gathering everything ahead of time will not only streamline the process but also help your broker find the best loan options, interest rates, and terms tailored to your financial situation.

Some documents might need to be ordered if you don’t have them on hand, and knowing what you need helps prevent waiting weeks for documents to come in the mail. Collecting the documents beforehand means you’ll get your preapproval letter sooner, which means you’re one step closer to buying your home.

Your broker will let you know what specific documents are required for your situation and when, but there are certain documents every lender will require, so you can start getting them ready to speed up the approval process.

Documents You Need for a Mortgage

Generally speaking, you’ll need most of your documentation at the pre-approval stage. A pre-approval is an estimate of what mortgage amount you’ll be approved for and if your mortgage broker is writing a pre-approval without these documents, that pre-approval isn't worth the paper that it's written on.

Your mortgage broker should ask for the following things for your pre-approval:

Personal identification (think driver's licence)
Proof of income and employment (think how you make your money)
Proof of down payment (usually between 5% and 20% of the purchase price of the home)
Proof of funds to cover closing costs (in Alberta, you should have about $,3000 set aside for closing costs)
Information about your assets (think vehicles, savings, investments)
Information about your debts and financial obligations (think car payments, student loan payments, credit cards & lines of credit)

Personal Identification

Personal identification is essential for your mortgage application. Your ID must include your full legal name, address, and photo.

Examples of IDs you could use include:

Driver's license
Passport
Permanent resident card

Proof of Income & Employment

Verifying your income and employment is essential for mortgage approval, as lenders want to know what kind of mortgage you can afford. Generally, you’ll need to prove your income and employment.

Usually, this is done through your most recent pay stub, your last two year T4's from your employer, and an employment letter from the company you work for. The employment letter should include your job title, salary or hourly wage and guaranteed hours, and how long you’ve worked for the company.

If you are self-employed, this can be a little more tricky. You should be prepared to provide:

Your last 2 years' Full T1 Generals (the 26 ish page document that is submitted to CRA when you file taxes)
Your last 2 years' Full Notices of Assessment (4-page document you receive after you file your taxes)
Your Statement of Account from CRA indicating that you have no taxes owing

If you're a sole proprietor, you must provide the Statement of Business Activities with your T1 General.

If you're incorporated, you'll have to provide either your Full T2s or your Notice to Reader Financial Statements for the last two years.

Some clients receive income from other sources as well; here are a few examples:

Spousal or child support. In this case, you will be asked to provide your Separation Agreement as well as your last three months' bank statements showing that the spousal and/or child support payments are made on a regular basis.
Child Tax Benefit. If you have children under 13, your mortgage broker can consider Child Tax Benefit as a source of income. To use this income, you will be required to provide your Child Tax Benefit Statement from CRA and three months' bank statements showing the payments are currently being made.
Pension Income. If you receive pension income, your mortgage broker will need the T4A slips from CRA for the last two years and your Full T1 Generals to prove payment. Often, the lenders will also for 3 months bank statements to show the successful payment.

Proof of Down Payment

Your down payment is a big part of your mortgage. Lenders will ask for a 90-day history on your down payment funds. Providing the 90-day history on the money is part of the Anti-Money Laundering regulations in Canada. Mortgage brokers need to confirm that the funds were not generated from illegal activity to the best of their ability.

If your down payment funds have not been in a verifiable account for the last 90 days, you will need additional documentation. For example, if your down payment is a gift, meaning someone gave you the money and does not expect it to be paid back, you will need a gift letter with the amount, donor name, and relationship to you. Each lender has a specific gift letter; your mortgage broker will provide you with the gift letter for your specific lender when you have a live deal.

If you sell something for your down payment, like a car, boat, or other items, you will need to provide a bill of sale to show where the money came from.

If your down payment is coming from out of country, you will need to provide wire transfer receipts showing that the funds have left the account in one country and been sent directly to your account in Canada.

For a full run down on down payment, please check out our Down Payment 101 blog post.

Proof of Closing Cost Coverage

In addition to your down payment, lenders need to know that you have enough money in your bank account to cover the closing costs of your home purchase.

Once you decide to purchase a home, you’ll need to pay the down payment plus closing costs:

Most closing costs include things like:
Home inspection
Home Appraisal (only if required by the lender at the time of mortgage approval)
Legal fees

These fees can vary depending on the deal's details and the home you’re buying. On average, expect to pay between $2,500-$4,000 for closing costs in Alberta. (Protip: there are no land transfer taxes in Alberta, so closing costs here are quite low compared to many other provinces.)

Asset Information

If you have other significant assets besides your down payment, your broker may ask for proof of assets. Proof of assets can be provided via statements from your bank and investment accounts. Typically, you need a screenshot of those accounts that include your name and account number and not a 90 day history on these accounts.

Debt Information

If you have existing debt, your mortgage lender will evaluate this to make sure you’re not taking on too much debt with your mortgage.

Your broker will ask for information about your debts, like monthly payments you make for:

Credit card balances
Child support
Spousal support/alimony
Car loans
Student loans
Lines of credit
Other mortgages or debt payments

Protip: Brokers will often ask for your most recent Notice of Assessment (NOA) or Statement of Account (SOA) to verify that you don’t owe any taxes to the CRA. You cannot get an AAA mortgage in Canada when you owe a significant amount of money to CRA.

Credit History

Your credit history is crucial for lenders to assess your ability to repay your mortgage. Your mortgage broker will ask that you sign a service agreement that allows them to check your credit score. Mortgage brokers run hard credit hits at the pre-approval stage. This will give them information like your credit score, current debt balances and monthly payment obligations.

Condition Day Documentation

When you offer to buy a house, you’ll have a condition date, which is the deadline for you to decide if you want to proceed with a home purchase. Most home offers will have a financing condition. This essentially says you agree to buy the house assuming your mortgage is approved.

The condition date is when you’ll need to have your mortgage approval by; otherwise, you risk losing the house if the seller isn’t willing to extend the condition date.

You will need to confirm a few things by condition day, like your employment details and the 90 day history on your down payment. Your mortgage lender might ask for other items before they approve the mortgage, like a home appraisal.

Typically, it takes about 72 business hours for an appraisal to be returned to the lender and you should count on paying between $350-$500 for this to happen. The appraisal fee is the responsibility of the borrower.

Closing Day Documentation

The next step is closing day, which is when you’ll actually get the keys to your new house.

You’ll meet with your lawyer to finalize everything a few days before closing day and they will explain all the documentation you’ll need. In most cases, your lawyer will ask for:

Two forms of identification, one of which must have a photo (e.g., driver's license, passport)
Proof of homeowner’s insurance (your binder letter).
A bank draft that equals your remaining down payment funds PLUS the legal fees and dispersments

Choosing the Right Mortgage Broker

The right mortgage broker will tell you what documentation you need well beforehand. They should get to know you and your unique situation, as certain circumstances might require different documentation.

Don't hesitate to ask your mortgage broker plenty of questions, and be upfront with what you want in a mortgage. That way, you both can ensure you have everything you need to make the mortgage process as smooth as possible.

For more information about what to bring to your mortgage broker, contact the mortgage specialists at Spire Mortgage or apply online.

Renee Huse