Here's What You Need for Mortgage Pre-Approval in Canada
Here's What You Need for Mortgage Pre-Approval in Canada
To get pre-approved for a mortgage in Canada, you will need to provide several documents to your lender.
Purchasing a home is a big investment, and getting pre-approved for a mortgage is a crucial step in the process. Mortgage pre-approval is a conditional commitment from a lender to provide you with a loan for a specific amount, based on your financial situation. This can give you an advantage when it comes to buying a home, as it shows sellers that you are a serious buyer and can afford the property.
To get pre-approved for a mortgage in Canada, you will need to provide several documents to your lender. Here’s what you need to know.
Income Verification
One of the most important documents you will need for mortgage pre-approval is proof of income. This will help your lender determine how much you can afford to borrow. You will typically need to provide the following:
T4 slips or a Notice of Assessment: This shows your income from the previous year, and is issued by the Canada Revenue Agency (CRA). If you are self-employed, you may need to provide business financial statements or tax returns instead. Employment Verification: This proves that you are currently employed and shows your income. You may need to provide a letter from your employer or recent pay stubs.
Credit Report
Your credit score and history are also important factors in determining your mortgage pre-approval. A good credit score can help you get a lower interest rate and better terms on your mortgage. You can obtain a free credit report from one of the two major credit bureaus in Canada, Equifax or TransUnion. Your credit report should show your credit score, credit history, and any outstanding debts or loans.
Down Payment Verification
In Canada, you are required to put down a minimum of 5% of the purchase price as a down payment on a home. You will need to provide proof of your down payment to your lender. This can include bank statements or investment account statements showing that you have the funds available.
Property Information
Your lender will also need information about the property you are planning to purchase. This includes the address, purchase price, and property type (e.g. detached home, condo, townhome). Your lender will want to ensure that the property is in good condition and that it is worth the amount you are borrowing.
Other Documents
In addition to the above documents, there may be other documents that your lender requires for mortgage pre-approval. These can include:
Identification: You will need to provide government-issued identification, such as a driver’s license or passport.
Mortgage Application: You will need to fill out a mortgage application form, which will ask for information about your income, assets, debts, and other financial information.
Proof of Assets: This can include bank account statements and investment account statements.
Other Debts: You may need to provide information about any other debts you have, such as car loans or credit card balances.
THE BOTTOM LINE
Getting pre-approved for a mortgage in Canada can be a complex process, but having the right documents can make it much easier. By providing proof of your income, credit score, down payment, and property information, you can increase your chances of getting pre-approved for a mortgage. Be sure to work with a reputable lender and provide accurate information to ensure a smooth pre-approval process. With pre-approval in hand, you can confidently shop for your dream home and make an offer when the time comes.
If you're self-employed or looking for alternative lending options in Canada, Level Up Mortgages can help you secure the best rates and terms. Our team specializes in finding mortgage solutions for those who may not fit traditional lending criteria, such as new immigrants and non-residents. With our expertise and access to a wide range of lenders, we can help you level up your mortgage game. Contact us today to learn more about our self-employed mortgage options and alternative lending solutions in Canada.
Level Up Mortgages is a mortgage broker team focused on helping the self employed, new immigrants, non-residents, and investors, access best rate and alternative lending in Canada. We have been nominated for best up and coming broker in Canada in 2021 and have been on CTV News and various publications because of our education-first approach to helping you always stay a step ahead of the process. Reach out to us for access to our first-time buyer course or a mortgage strategy session.
See What You Qualify For Or Contact Paul To Get Your Pre-Approval.
Paul Davidescu (www.levelupmortgages.com)
Level Up Mortgages
604-809-3188
paul(at)levelupmortgages.com
See Our Google Reviews in BC & Ontario:bit.ly/GoogleReviewLUM ⭐️⭐️⭐️⭐️⭐️