This is where you can find information on what documents we need and why we need them. Click the title buttons to see an actual vision so that you know exactly what to send!
The T1 commonly referred to as the Tax Summary is the document that you use to submit your taxes to the government. Normally, the individual or organization that prepares your taxes will have access to this if you do not have it yourself. Credit officers use this document to confirm all reported income for the tax year requested.
The Notice of Assessment is a document that Canada Revenue will send you once your taxes are filled that provides a summary and confirmation of declared income and refunds or any taxes owing. Underwriters want to see this document usually to confirm there are no taxes owing. If funds are owed to CRA, confirmation of them paid up to date is usually required. It is normally mailed to you by CRA and can also be found by logging into the CRA MYACCOUNT website.
Confirmation of income and benefits earned in the previous tax year. This is generally requested prior to tax season so the underwriter can verify and get an understanding of income earned over the past year. Your employer or the source of your income/benefit must provide a T4 to you prior to the deadline.
Even if your income is deposited directly to your bank account, your employer must provide you with a hard or soft copy of your pay-stub. This will provide the underwriter with essential information as to how your income is earned and must be in line with what is disclosed in the other documents collected for the mortgage application. The pay-stub you provide must be dated within the past 45 days. If you earn a pay-cheque you will need to provide this document, every time.
The purpose of collecting this document is to verify that you are employed with the employer you've stated on the mortgage application and to confirm other crucial details such as: probationary period, full-time or part-time, length of employment, income, etc. Generally, you will have to request this document from your human resources department. Ensure that the letter is written on a company letterhead to ensure it will be an acceptable document to submit to the lender.
Gift letters must be submitted to the lender with any mortgage application where the down-payment for the home is being gifted to the borrower. The gift letter must state that the funds being gifted are not to be paid back otherwise the lender will understand this to be a loan and it will affect your ability to qualify. Your broker or agent will provide you with the corresponding gift letter template that is to be used with a lender. It must be signed by the individual(s) providing the gift.
Bank Statements are typically only requested for two reasons. Firstly to verify income that enters your account such as pension or disability income or to confirm your down-payment. In the context of confirming your down-payment you have to be able to prove that you have the funds available to the lender as well as additional money for closing costs. Closing costs are usually in the range of 1.5% of the purchase price. When confirming down-payment you must provide 90 days of bank statements to satisfy this requirement.
Generally, a divorce will create financial obligations for one or both of the divorcees, if children are also involved these implication can increase. Underwriter's will want to confirm what financial obligations you are responsible for or are receiving as a result of your divorce or separation. This document is provided to you by the lawyer who handled the divorce.
If you are self employed it can be challenging to verify income you've earned as often the revenues are mixed with expenses and certain expenses are eligible for tax write-offs etc. In order to attempt to confirm or add back any eligible written off income, you must provide your broker with a copy of your financial statements. These must be prepared by your accountant or tax professional. Usually when asked to submit financial statements, you will need to provide between 2-3 years.
This document is found within your T1 or tax return summary. This is usually submitted in conjunction with your financial statements to confirm the accuracy of the financial statements.
If you own a rental property, underwriters will want to see this statement to confirm the expenses involved in operating the rental property and the gross and net rental amounts received. This is found within your T1 General or tax return summary.