You will need to present the following documents to a banker or other lender for the application of your new mortgage:
• 2 years of Notice of Assessments
• 2 years of T1 general tax return forms
• 2 years' proof of business (your GST number and article of incorporation)
• Written employment letter from Human Resources stating salary or hour wage /minimum hourly work week/position /start date - if less than 3 months (letter stating you are not on probation)
• Current pay stub
• 2 years of T4 statements if you would like to use overtime earnings
Have these documents ready when you meet with your mortgage specialist and things will move swiftly for you.
Shopping it Around with a Mortgage Broker
When a young woman goes shopping, she doesn't mess around; finding the best deal is worth taking the time and doing it right, and that may include using a professional shopper.
Apparently, shopping for a house mortgage is not much different for Canadian 20 and 30-something women; they are the demographic most likely to use a professional mortgage broker, according to the 2009 Mortgage Consumer Survey [pdf] conducted by Canada Mortgage and Housing Corporation (CMHC).
The survey found that 25 to 34-year old Canadians make up 42% of consumers who use an accredited mortgage professional, while female purchasers make up 43%.
The Accredited Mortgage Professional (AMP) is the only national proficiency standard for Canada’s mortgage industry. Launched in 2004, the AMP designation was developed as part of CAAMP’s ongoing commitment to increasing the level of professionalism in Canada’s mortgage industry.
Raising public awareness and increasing the value of the designation is a high priority for CAAMP.
First-time home buyers are also much more likely to use a mortgage broker than the general public, and that number is on the rise, sharply - from 35% in 2007 to 44% this year who favour brokers.
Loyalty to lenders (e.g. traditional banks) is down significantly among first-time buyers - from 65% in 2007 to 47% loyalty this year.
1/4 of All Mortgages Involved Broker
The CMHC survey shows that from June 2008 to June 2009, one quarter of all mortgage transactions were arranged through mortgage brokers. Aside from the first-time buyers, young and female demographics discussed, the use of mortgage brokers remains stable amongst other Canadians.
Working with a mortgage broker may make the most sense for first-time buyers, to help sort out the complicated formulas required and to minimize damage to one's credit score.
Reasons to use a mortgage broker include:
• Independent, unbiased advice; as a freelancer, the broker won't favour one bank or credit union over another based on anything except rates
• Access to as many as 40 government and CMHC-approved lenders
• Negotiates rates with lenders directly, on your behalf
• You pay no fee (the broker charges the lender)
• The broker educates you on all your options including: open, closed, high ratio, first, second, conventional, CMHC-insured, HELOC, VTB mortgages, prepayment privileges and penalties, reverse mortgages, private loans, and more.
Financial Privacy Issues
However, be wary when sharing your personal financial information; make sure that your mortgage broker has been accredited by a body like the Canadian Association of Accredited Mortgage Professionals and complies with provincial laws requiring education, training and licensing standards. Like in any industry, malpractice by a few brokers has resulted in mortgage fraud (a form of identity theft).
You should check and see if your mortgage broker is licensed and in good standing with your provincial regulator:
• FICOM in BC
• RECA in Alberta
• SFSC in Saskatchewan
• FSCO in Ontario
• ACAIQ in Quebec
• Service NS in Nova Scotia
Have you used a mortgage broker or know someone who has? Share your stories, or questions, below.
Your Mortgage Application Should Resemble a Great Resume
Do you just walk into the bank, sit down and let them make the application on your behalf?
If you answered 'yes' to this question, then you need help!
Think of it this way...
Would you walk into a job interview empty-handed, with no specific information to leave behind with the potential employer about your strengths as a candidate?
Would you hand over a messy resume with all kinds of missing information?
No, of course you wouldn't - not if you wanted that job!
So, if you want a house, why would you treat your written mortgage application process any differently than your polished, well-documented resume or job application form?
The Ideal Structure
The best way to take advantage of the lowest rates in history is to structure your mortgage application so it's the most appealing it can be before you submit it to a lender.
To assess what goes into the ideal mortgage application; ask yourself:
• What income can I use, and not use?
• What do the banks think of a part-time job?
• What does my credit score need to be in order to get the best rates?
• How much of my consumer debt should I pay down first?
• Should I put a consolidation loan in place?
• How can I best boost my credit score?
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