Residential Mortgages

THE PROCESS

If you are just looking for a pre approval, all we need from you is a completed and signed mortgage application.

Once you have found the home you were looking for, you will need to provide us with the following:

1. Signed and accepted Purchase and Sale Agreement and the Listing or Fact Sheet. (These documents are required before CMHC/GE Capital can approve the insurance.)
   
   
2. Income Verification:
   • If you are a salaried employee, the lenders require a letter from your employer stating length of time employed, position held, gross annual income, and that you are a full time, permanent employee.
   • If you are self-employed, on contract, or on commission, the lenders require 3 years Notice of Assessments from Canada Customs and Revenue Agency. The average of these 3 years will determine your income for debt servicing purposes. If you are on contract, you will need to provide a copy. If you can't find your tax assessment, call Canada Customs and Revenue Agency for copies.

   If you are self-employed or on a 100% commission and the income you pay tax on is not sufficient to meet minimum debt servicing requirements. CMHC/G.E. Capital will still approve a mortgage up to 85% loan-to-value, subject to the following conditions:

   • Good credit rating
   • Confirmation of at least 3 years in business by way of Articles of Incorporation or Business License
   • CMHC/G.E. Capital insurance fee is 3.60% plus an application fee of $300
   • Providing most recent Notice of Assessments confirming income tax is paid
   
   
   
3. Down Payment Confirmation:

   Any down payment less than 25% of the purchase price will require confirmation of an additional 1.5% to cover closing costs such as legal fees, land transfer costs, and the appraisal fee. For example, if you purchase a home for $200,000 and have 10% down or $20,000, you will need to confirm an additional 1.5% or $3,000 for a total of $23,000. Down payment can come from one of the following sources:

   • 3 months bank statements - if the funds are coming from your savings account, RRSP/GIC statement or Stock Investment Certificate
   • Purchase and Sale Agreement for home being sold if down payment is to come from the sale of existing home. A copy of your current Mortgage Statement would also be required in order to establish the equity/ proceeds of your sale.
   • A Gift Letter is allowed from a relative and once the funds are deposited to your account this must be confirmed via bank statement. Any large deposits to your account must be explained. (i.e. sold an asset, vehicle, tax refund, etc.)

   As of February 04, 2004, CMHC/GE Capital allows the client to borrow the down payment, providing the monthly payment on this debt does not put debt servicing ratios above the maximum acceptable level.

   To ensure a smooth closing, we advise our clients to meet conditions 10 days from acceptance of the commitment if possible, or at least 3 weeks prior to closing.