Frequently Asked Questions

Your Next Steps (and Why We Ask For So Much These Days)

With higher lending regulations and standards being implemented across the country, it can feel like an overwhelming task to complete everything your lender is asking you to do. In some cases, it can be frustrating too. I hope by taking some time with you to review the financing process upfront, it will help you to: make some informed decisions along the way, answer some questions, and make you feel less overwhelmed throughout the process.

  • Who do you work with?
  • Step 1: Documents Lenders Require
  • Step 2: Obtain Pre-Approval or in some cases an Approval for the financing being requested
  • Step 3: Meet the lenders conditions and finalize financing.
  • Step 4: Look back and be proud of what you’ve achieved and Make More Plans

Great question.

If you are reading this now after our initial conversation, you have likely decided to have someone work with you to obtain financing options, and, you probably like that it will be easier and faster than doing it yourself. This is what a Mortgage Broker is here to help with, and I am excited to be a part of your journey.

Before I forget, communication is going to be key and feeling comfortable to ask any question is important. I truly believe that no question is a silly question. That said, in reading the Written Service Agreement you have learned that by being honest and transparent with me I will better understand your needs and current circumstances. It will also outline how we will be working together.

Mortgage Brokers have access to all three tiers of financing available in the marketplace. With a plethora of lenders at your disposal, each of them will have multiple products for you to review should you qualify for them. You may wonder if too many options could be a hindrance to your decision-making but let me assure you, it is not. With the help of your broker, navigating through all the options is your best bet at landing the deal you really want.

You have already been provided (by email) with your own Document Checklist which is detailed to suit you and your circumstances. Please note these documents are curated to every client’s personal needs. That said, it is still a good thing to understand what could be expected of you, should you wish to become the expert of your own financing and prevent any worries in finding a document or two you may only see once a year. Especially if moving or if this is not an area of strength for you.

For us to start working together I ask that you provide these documents up front for a few reasons. First, the more information upfront returns the best options available to you on the market. Second, lenders today are looking for documents upfront as well, so I will have to provide the documents requested upfront to them right away.

In hopes you find it helpful, below is a chart outlining the types of documents that could be asked of you when it comes to how a lender is going to verify your income. This is subject to change as all lenders will require different documents but again I hope you find this helpful.

Historically, I have found financial jargon can deter people from learning more. That’s why I created this list of definitions for your reference. I hope it helps!

Company Financial Statements
This is a document prepared by your accountant. It will provide the summary of the company’s financial information and is basically a combination of 4 documents your accountant will refer to as the: balance sheet, income statement, cash flow statement and statement of changes in equity.
Letter of employment
This is a document you would obtain from your HR department. The letter of employment will need to be dated within the last 30 days, be on company letterhead and include your current employment information such as income earned, and position held. Just keep in mind that your employer is often asked for this information regularly so if you have an HR department or whomever does payroll this is who you would approach to get the letter of employment done for you unless your employer has converted to an electronic system. In that case maybe get some direction from a manager or college on how you can print off that letter from your employee portal.
Notice of Assessment (NOA)
This is the document that is mailed back to you once you have filed your taxes with Canada Revenue Agency (CRA) and will confirm if you had an amount you were required to pay or if you were getting a refund back from the Government.
Partnership Trade Name(s)/Articles of Incorporation.
These documents are obtained from the registry office and are provided to you when you are opening the company either as a partnership possibly with a trade name or have an incorporated company. They are updated with any changes to the company and are maintained regularly (generally on an annual basis) by yourself.
Pay stub.
This is a document you generally are provided with each time you are paid from your employer. The pay stub will also need to be dated within the last 30 days.
Statement of Business or Professional Activities
This is a schedule titled the ‘Statement of Business or Professional Activities’ and forms part of the T1 General. It will outline the expenses that are being declared as part of the business being operated.
T1 General.
This is the document that is used to file your personal taxes with Canada Revenue Agency (CRA). It can be lengthy in size and the actual form is often not provided to you. Should you have an accountant you work with request they forward you or provide a copy to me directly. A full copy of the document is preferred and may also be required. If you don’t have someone you work with the minimum pages you will want to provide me with is the first 5 pages. Those pages will outline your personal details on the first page and will note if you owe CRA or if CRA owes you money on the last page.
T4 slip.
This is a document you are provided with by your employer on an annual basis around February/March of every year confirming the total amount of income you were paid in the year prior. You would use this document when filing your personal income taxes to Canada Revenue Agency (CRA).

What is the difference between a pre-approval vs. an approval?

Another great question!

A pre-approval is a snapshot of how your application looks at a moment in time and holds onto an interest rate for a short period of time for you (which is often 120 days). In some cases, you can have the interest rate held longer and if available this will be discussed with you. A pre-approval is not a guarantee of a mortgage approval and you, along with the property, will need to re-qualify for that financing you are seeking within 120 days of the closing date/date of completion of the financing being taken.

If someone suggests otherwise, you need to make sure you meet the lenders conditions, not them, as you are the person signing the contracts and/or commitments and will need to ensure you can close on what you are signing into.

On the other hand, an approval has the property and applicants (you) reviewed and approved for the financing being requested. An approval is just like the pre-approval where you are approved based on how your application read in that snapshot. Again, any changes to your application could change your pre-approval and/or approval so make sure you discuss changes with me in advance, otherwise you may be putting yourself in harm’s way. You want to always make sure you can re-qualify (at minimum) until the day you take possession of the property or until you close the financing you are working on. It is highly suggested you do not change your credit or seek additional credit during this time as it won't be reflected. Any changes should be discussed in advance.

Now that you have the lenders approval you will work with me to get the approval completed. Good news here is you will likely not have as much to do in this step as you did in Step 2.

When you hear me refer to a ‘condition’ that the lender has asked you to meet, what I mean by this is that they are looking for you to prove to them what you’ve held forward in your mortgage application. For example, if you are an employee earning an annual income of $50,000 or said you had a $50,000 down payment, they are going to look for verification of this. I will work with you to meet that condition. All lenders will have different criteria on how you can prove this to them so again, in hopes of keeping it simple, at the time of approval I would communicate to you in a document I refer to as the ‘Condition Letter’ what your lender requires you provide as supporting documentation.

During Step 3, the most important thing you can do here is work with me as quickly as you are able to so you can meet the conditions on an ASAP basis. This will release some of the natural stress that comes with obtaining financing (it even happens to me) and it will make sure that no other part of the process is slowed down. With all the privacy laws out there, you are responsible to provide the documents a lender requires. That said, if I can help with a few items I will, and will be sure to communicate that with you along the way.

Looking back and being proud of what you’ve just achieved is important so make sure you take some time to soak that in! And then, go back to the drawing board! Try to make some more plans on how you see yourself becoming the expert of your own financing.

I hope you have found this additional information on your next steps helpful; however, if you have any further questions or concerns please do not hesitate in letting me know!