Documentation checklist
Use the following checklist to make sure you’re meeting documentation requirements.
Any other documents might be requested by the lender, in addition to the ones listed above.
Personal
Credit Authorization (Signed)
This is a document you’ll digitally sign to give me permission to check your credit report via Equifax and/or TransUnion
List of Assets (every borrower)
A simple, informal list of your assets to help strengthen your application. This can be provided in bullet point form or a spreadsheet, whichever is more convenient. The lender might ask for more details or a bank statement if it’s needed
Divorce or Separation Agreement (marital status if divorced/separated)
An agreement between yourself and your ex-spouse. If you don’t have it on file your lawyer should be able to provide this
Income
Notice of Assessment (every borrower, all pages)
(NOA) is mailed to you by the CRA (Canada Revenue Agency) each year after you file your taxes. This document indicates how much money you made for that year, how much you had to pay in taxes, and your current outstanding income taxes owed or the amount of your tax refund.
Pay Stub(s) (borrower has employment income)
If you’re an employee, the pay stub confirms ongoing employment and verifies your rate of pay. The pay stub should be your most recent (within the last 30 days). Make sure the document includes year to date figures, current deductions, and year to date deductions.
Letter of Employment (borrower has employment income)
The letter of employment (LOE) should be dated within 30 days and include your manager’s contact information. It needs to include the following details
1) Start date..
2) Your position in the company
3) How you’re paid (hourly, salary, commission, etc)
4) Whether you’re off probation
5) If your hours are guaranteed
6) And if you’re full time, part time, contract or flex
T4 – Statement of Remuneration Paid (borrower has employment income)
The tax slips are prepared by your employer. It includes what you have been paid before deductions. If you don’t have a copy, your employer will have a copy on file
T4A Slip (borrower income is commission only or has pension / other income)
You receive a T4a for ‘other income’ which includes commission, pension, retiring allowance. This is prepared by your employer or administrator.
T1 Income Tax Return (full) (borrower has self-employed income)
This is the form to complete your annual tax return. You likely have this on file. If you have an accountant they might be able to provide a copy.
Self Employed Master Business License (MBL) (borrower has self-employed income)
- 2 years T1 Generals with financials and statement of business activities
- Articles of Incorporation (if incorporated)
- Business/personal Bank statements (6-12 months)
- 2 years NOA to confirm income and no taxes owing (if using declared income to qualify deal) Invoices to match the bank deposits being used to confirm income
- Website address if available / Job letter (if working as a subcontractor with a company)
Purchases
MLS Listing (borrower has found a property)
Your Realtor has a special view of the MLS with more detail than is found on the public-facing website. The lender needs the special Realtor version of the MLS.
Purchase Agreement (Signed) (borrower has found a property)
The contract between you and the sellers of the property. Your Realtor can provide this. If it’s a new build the developer can provide it.
Purchase Waiver (borrower has found a property)
When you remove all conditions you’ll sign a purchase waiver. Your Realtor will provide this.
90 Day Bank Statement (every borrower)
Bank statements can be serve a number of purposes:
1) Verify down payment and cash for closing costs
2) Prove your income by showing paychecks being deposited into your bank
3) Show other supporting deposits or expenses (e.g., for self employed individuals)
4) Confirm gifted down payments have been received
It’s important your bank statements show your name, account number, and full (unaltered) transaction history. If your down payment is in multiple accounts or has been transferred between accounts, a 90-day history is required for ALL accounts.
You can find these statements by logging into your online banking portal and download a monthly statement PDF.
Gift Letter (if needed)
If the down payment is a gift from a family member,
This lender confirms an immediate family member is assisting you with a down payment. I’ll provide you with a template to complete
The letter must include the following
1) Your name (as the gift recipient)
2) Giver’s name, relationship to you and contact information
3) The total amount
4) Validate the gift does not need to be repaid and is not from a third-party interest in the property.
NOTE:
✅ Acceptable : Parents, Siblings, Children
⚠️ Maybe (with exception): Grandparents, Aunts or Uncles
⛔️ Not accepted: Friends, Enemies, Cousins, Spouses
Other things to be aware of:
- The gifted down payment needs to be in Canada.
- Gifts from outside of the country require more time, especially if we need to hire a translator.
- Certain countries are restricted and therefore impossible to use a down payment. For example, Iran or Russia.
Confirmation of Gifted Funds Deposit (if needed)
If down payment is a gift from a family member:
Proof the money has been deposited into your account. See the 90 day bank statement requirement.
Properties owned
Mortgage Statement(s)
If keeping property with a mortgage:
If you have any outstanding mortgages you need to provide a mortgage statement from your lender. It needs to show the lender’s name, your name, mortgage number, interest, payment, balance, and maturity date.
If you don’t have a copy, you can obtain one via
1) your bank’s online portal or 2) by calling your mortgage holder’s customer service line.
Property Tax Statement
If keeping a property currently owned:
Each year at tax time the city will send you a property tax statement showing your property tax bill and the amount owing/paid. The lender needs a copy for every property you own.
Sale Agreement (if selling a property currently owned)
This is the contract to sell your current property. Your listing agent/Realtor should have a copy.
Sale Waiver (if selling a property currently owned)
This is an addendum to the sale agreement confirming that the buyers have removed subjects and the sale is binding.
Rental Tenancy Agreement (if receiving rental income)
If you currently rent a property you own, we need a copy of the lease agreement between you and the tenant.
Status certificate (if keeping a property with strata fees)
A letter that proves the monthly condo fees for your condo or townhouse. Your condo board or strata manager can provide this.
Incorporated
A-Lender’s
- Articles of Incorporation
- 2 year’s business financials
- 2 year’s T1 generals
- 2 year’s T2 tax return
- 2 year’s NOA’s
- SOA if required (Statement of Account – CRA statement showing the outstanding balance owed to Canada Revenue Agency)
B-Lender’s
- Articles of Incorporation
- 6-12 months business bank statements
- 1 year business financials
- SOA or page 1 of most recent personal NOA
Sole Proprietor / Partnership
A – Lender’s
- Master Business License
- 2 years T1 generals (ensure the statement of business activities are included)
- 2 years NOA’s (SOA if required)
B-Lender’s
- Master Business License
- 6-12 months business bank statements
- Most recent statement of business activities
- SOA or page 1 of most recent personal NOA
Definitions
T2 Corporation Income Tax
All Canadian based corporations are obligate to file a T2 return every tax year regardless if there are taxes owing. This is the tax document filed for all incorporated businesses.
T1 General (Jacket)
The T1 general is the document your Accountant files to CRA when they do your personal income tax return. It is typically 40-50 pages long and is not available to you on the CRA website. You will need to obtain it from your Accountant if you do not have a copy. Everyone has one of these regardless of the employment type or business structure.
Statement of Business activities
The Statement of Business Activities (T2125 tax form) is used to calculate your business or professional income as a self-employed person. Use it if you are the only person in the business (sole proprietorship) or if you are in business with one to five other people (partnership). It is part of the T1.
T4
Your T4 is a form used by your employer to state how much you earned and what your payroll deductions for that tax year were. This will include any CPP and EI deductions, as well as any other deductions taken that year.
T5
States income from interest from nonregistered investments.
Notice to Reader (NTR)
This is a document compiled for information purposes by a company. It is typically prepared by a licensed Accountant or CPA who is external to the company. We find this document much easier to read when looking at the income and expenses of an incorporated business to see what the finances look like. The most relevant pages of this document to us are typically the income statement and statement of earnings and retained earnings.
Profit & Loss statement
This documents are often just printed from a clients bookkeeping software (like quickbooks). This is not filed with the government but could also be a good document to review in order to see what the finances of the business look like.
Cost of goods (COGS)
Cost of goods is the actual cost of an item after all the production costs have been deducted. Production costs being labor, materials, shipping, etc.
Shareholder loans
Money lent from the corporation to a shareholder
Retained earnings
Retained earnings are the amount of money that a corporation has left in their company (retained) after paying all of it direct and indirect costs, taxes and dividends to shareholders.
Gross
Gross is the amount of money made BEFORE taxes or expenses are deducted.
Net
Net is the amount of money made AFTER taxes or expense deductions are paid. Revenue – Money earned by selling products or services.
Expenses
A cost associated with running the business.
NOA Notice of Assessment
A 3-4 page form that Revenue Canada sends back to you as a summary of your received Tax Return. It will either contain a refund cheque or a bill for your outstanding taxes for the previous tax year. It will include the date, your full name, SIN number, tax year and tax center clearly indicated in the top row of the page.
SOA Statement of Account
CRA statement showing the outstanding balance owed to Canada Revenue Agency.
Gross Up
Percentage increase of the clients income allowed by a lender for BFS clients who have write offs that can be added back to their income (eg. writing off a home office) to be able to use a higher income amount for qualification of the client. Refer to specific lender policies of what percentage they allow. Most A lenders will allow up to 15% gross up on sole proprietor or partnership income (not incorporated)
Expense Addback
Some lender policies allow expenses that are written off to be added back to the income to be able to use an increase income amount for qualification of the client. Refer to specific lender policies of what percentage they allow.