Before you start browsing listings and booking home viewings, there’s one critical step every buyer should take—getting mortgage pre-approval. Not only does this help define your budget, but it also shows sellers you’re serious and financially ready.
Here’s what you need to gather to get mortgage approval:
1. Income Documentation
If you are an employee:
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Letter of Employment (dated within 60 days)
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Most recent Paystub (dated within 30 days)
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Most recent T4 (required if income includes hourly, bonuses, commissions, or overtime)
If you are self-employed (sole proprietor):
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Notice of Assessment (NOA)
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T1 General Tax Return
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Statement of Business Activities (T2125)
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Proof of Tax Payment (if any balance is owing)
If you own a corporation:
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Notice of Assessment
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T1 General Tax Return
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2 Years of Financial Statements (prepared by an accountant)
2. Down Payment Verification
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90-Day Account History
Show the history of any bank accounts where your down payment will come from. Ensure your name and account number are visible. -
Large Deposits
Be prepared to provide documentation explaining any large deposits. Lenders want to ensure funds are not borrowed. It’s best to avoid moving money between accounts unnecessarily.
Getting pre-approved gives you a major edge in a competitive real estate market. It allows you to shop with confidence and negotiate like a pro.
FAQs
Why is mortgage pre-approval important?
Pre-approval helps define your budget, improves your credibility with sellers, and speeds up the final mortgage process.
What happens if I don’t get pre-approved?
You might fall in love with a home outside your budget or risk losing it to someone who is already pre-approved.
Do I need to have my down payment saved before applying for a mortgage?
Yes, you’ll need to show proof of where your down payment is coming from, including 90-day account histories.
How long is a mortgage pre-approval valid?
Most pre-approvals are valid for 90 to 120 days. After that, you may need to update your documentation.
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