Mortgage Checklist for the Best Canada Mortgage Rates
1. Mortgage Checklist For the Best
Mortgage Rates in Canada
Check Your Credit
Before you even start, it is advised
to check your credit bureau
information. There are an
increasing number of studies that
show that over 79% of individual
credit scores have errors. This step
is completely optional. However, it
is in your own best interest if
you’re seeking a loan. You are allowed to order a free copy of your
credit score from Equifax and TransUnion once per year. Check and
dispute any errors before you submit your loan application. You can’t
get the best mortgage rates in Canada if you have bad credit that isn’t
even if your fault. If you’re reasonable certain your credit is correct,
than you can skip this optional step.
2. Personal Information
Obviously, your lender is going to want to verify who you are. You’re
going to need supporting documents to specify your date of birth,
current address and phone number, marital status (if applicable),
number of dependents (if applicable), addresses for the past 3 years,
and of course, your social insurance number (SIN).
Verify the Property
If you aren’t already in the process of purchasing
a property and are instead just seeking a
preapproval, this will not be required. A
mortgage preapproval is a great way to get your
offer taken seriously. Lenders will typically ask for
a copy of the purchase and sale agreement, copy
of the MLS listing, address and description of the house if it is a private
sale with no MLS listing, current owner contact information to access
the home (if applicable), new construction plans and specifications (if
applicable), and your lawyer’s contact information (can be sorted later).
Verify your employment/income
You know where you work but your lender may not. Depending on the
type of employment, you may need anything from a few paystubs and a
letter of employment to NOA (notice of assessment) and T1 to verify
your income. It used to be that two years of T4 statements was enough
but the increasing amount of fraud, many lenders may now require an
N1 and/or T1. It’s really at the discretion of the lender so there is no
easy answer. For salaried employees, most lenders only require your
two most recent paystubs. What you will require will depend largely on
how the lenders perceive your situation as a borrower so be mindful of
3. this. Lastly, if there is any employment gap in the last year, you’ll want
to provide a written explanation of that.
Down Payment
Not only are you going to need to know exactly how much of a down
payment you have available, you’re going to need to verify your down
payment. In recent memory, some buyers and
sellers were arranging for phone receipts and
papers claiming down payments that didn’t actually
exist in order to commit mortgage fraud. Don’t be
alarmed if your lender asks for bank records to
verify the down payment.
Determine the Best Type of Loan
There are numerous loan types of packages available. Your needs will
vary with your own personal situation. If you’re unsure, the best thing
to do is to discuss with an experienced professionally mortgage broker.
Typically, mortgage brokers are paid a commission from the lenders
directly so there is no cost to getting this kind of advice. You’ll want to
not only discuss the loans but the fees involved as many buyers can
often overlook them.
Miscellaneous
Most of this information is not required, although some lenders may
ask for it. However, it’s a wide idea to be pre-emptive about your
mortgage. Lenders are just people and so if you look incredibly
prepared, it’ll make your loan easier to give the proverbial stamp of
approval to and you can often actually get the best mortgage rates in
4. Canada. You can make a complete list of your assets, including
personal bank accounts verified by 3 months worth of statements,
confirmation of that down payment, current value of any and all
investments including RRSPs, value of life insurance and supporting
documents, information on your cars including estimated value as well
as pictures and how much you owe, information on any significant
property and/or real estate you own, and any information on financial
gifts or bonuses you have received. You can also itemize your debts,
provide a written explanation of any bankruptcies (if applicable), and
written explanations of past credit problems. While these are not
required, they can help make the banks understand your situation
more easily.
Getting the Best Mortgages in Canada
There are so many different lenders and loan packages
that getting a top mortgage can seem overwhelming.
Getting expert advice is paramount in getting the best
mortgage rates in Canada. You can and should speak
with an experienced mortgage broker who can help shop your loan for
you. Another option is to use a mortgage search engine like
CanadaRates.ca which can search lenders for you. It’s a free mortgage
search engine that connects people with hundreds of lenders. A lot of
people find that it’s by far the easiest way to get the best possible rates
in Canada. Whatever you do, be advised that your bank often has a
“preferred rate” that they only offer to you once they know you’re
shopping around. Be sure to let them know that you’re using a service
like http://canadarates.ca or a professional mortgage broker and you
can get the best mortgages possible.
