Getting a mortgage pre-approval is a huge step toward home ownership. It allows you offer a price on a home and know the money is there waiting for you. What could be better? Most Canadian banks and lenders have a list of documents they need before they will process your request. So, to make your job a little easier, here are some of the most common mortgage pre-approval requirements:
Nearly every bank or lender you speak with will want to know your current employment status, and some may even want to know your previous employer. Just telling them, however, won’t be enough. You’re going to need to provide proof of your employment. Most often, this will come in the following documents:
- Letter From Your Employer – The letter will need to include your salary and the length of time you have been employed at that particular company. If you can get them to throw in that they don’t foresee letting you go anytime soon, that will be a huge plus.
- Tax Return – This will also show your salary information and prove that you are employed. If you are self-employed, you may need to provide two years’ worth of tax returns.
- Salary Information – If, for some reason, this information isn’t included in the aforementioned documents, you will need to provide it.
Liabilities and Assets
Another requirement to getting your mortgage pre-approved is to provide a list of your current assets and liabilities. This will do two things: first, it will give them a rough idea of where your money is going. Second, it will see what your spending habits are and if you tend to spend beyond your means.
The list of assets will be anything you own outright. Things such as paid-off cars or boats, retirement accounts, savings accounts, and stocks all are considered to be assets. Pretty much anything that is either already paid for or which brings in money.
Liabilities, on the other hand, are things on which you owe money. Credit cards, student loans, your current mortgage (especially if you are not planning to sell your house), or any loans you may have co-signed. The banks and lenders pretty much just want to make sure the out-go is not more than what you are making, and that you have enough left over for a home loan.
While the aforementioned are the biggest items you will need to be pre-approved, you will also need some extra documentation. You will need to have handy your personal identification, which is simple enough. A driver’s license will work just fine.
You will also need to know what you are planning to put as a down payment and have that information ready. Just a simple bank statement showing the money in the account will work. If you are planning to receive the down payment as a gift from someone else, you will also need a letter from them stating that they don’t need to be paid back
For any additional answers, or to get started on the pre-approval process, be sure to contact Steven Owens at www.mymortgagebroker.com or 403-870-2669. He can walk you through the process, making it easy, fun, and fast.
- Mortgage Pre Approval Calculator Canada – How to Use it and What it Will Tell You