One of the first things you should to do when choosing to buy a home — even before you start to search — is to get a pre-approval for your mortgage.
A mortgage pre-approval shows the buyer the value of the home they can best afford and the mortgage payments associated with the purchase prices. It also secures a mortgage rate for a period of time, which could vary from a 1 year term to a 5 year term. You are not compelled to stay with the bank or mortgage broker from whom you received your mortgage pre-approval and there are no costs associated with receiving a pre-approval.
The mortgage documentation you will need to bring to your lender in order to get the pre-approval you need.
1- Down payment Information:
For this, you will need bank statements from the past three months. If you are selling a home before you buy another one, a copy of the sale agreement is needed. If the down payment was a gift from a family member or friend, you need a letter stating that as well.
When you are ready to buy a home and obtain your mortgage, the bank will request a number of documents relating to the property you intend to
- acquire, including:
- Contract of Purchase and Sale Agreement
- MLS Listing
- Title Search
- Property Disclosure Statement
- Contact information for your notary
2- Employment Information:
If you are self-employed, you will require a copy of your T1 General and Notice of Assessment. If you are employed, you’ll require a copy of your most recent pay stub, your most recent T4 and a letter of employment from your employer stating your salary and duration of employment.
Mortgage Pre-Approval vs. Mortgage Approval:
Like the pre-approval, a mortgage approval will contain all of the essential details about house you desire to buy. The mortgage approval will often include further details, such as full address, the purchase price, the closing date, property taxes, which are not included in the mortgage pre-approval. Once your mortgage provider has all of these details, they will give a mortgage approval as long as they are content with the property you are purchasing and your qualifying criteria.
Please not that a pre-approval does not automatically mean that you will get a mortgage loan. Once you have a specific home in mind, the lender will want to confirm that the home or property meets certain standards before finally approving your loan. At that point, the lender could refuse your mortgage application.
We can help you with most of the documents required for a pre-approval and approval! We work with a number of preferred and experienced mortgage brokers who will happily assist you with your evaluation and pre-approval/approval.