There’s a lot you need to know when navigating the world of mortgages.
And, if you’re not careful, it’s quite easy to get tripped up in the lingo, the procedures, and the payments. (Not to mention the penalties.)
This is why we’ve recruited Jerome Trail, owner and broker of record at The Mortgage Trail, to answer the most important questions homebuyers and homeowners should understand before moving forward in their mortgage process.
Today, Trail is offering the answer to the inquiry: “How can I prove I qualify for a mortgage?”
Have another mortgage question, or looking for mortgage advice?
Contact Jerome at The Mortgage Trail — mention STOREYS, and you’ll receive a free appraisal!
"There are several items that lenders are watching out for when providing mortgage financing, and their main concern is fraud," Trail explains. "The lender will be extremely diligent to ensure that you can income-qualify for the ongoing servicing of the mortgage debt... They will make sure you can pay them back!"
To begin, Trail says, those employed by a company (as opposed to freelancers, or those who are self-employed) will typically have their employment confirmed with three items: A letter of employment, a pay stub, and a call to the employer which confirms the details of the employment.
And while a three-step process may seem a handful (a letter of employment and a phone call?), this procedure is actually the less zealous of the options on the table.
"If you work for yourself, the requirements are a little more intense," Trail says. "Typically, we ask self-employed clients to be prepared for an extensive vetting process."
This means, at a minimum, the lender will require:
131 Doris Avenue (Zolo)
- Tax submissions from the last two years (T1 Generals)
- Tax returns from the last two years (Notices of Assessment)
- Financial statements
- The business' registration, or Articles of Incorporation
In addition to the above, Trail says lenders may ask for additional, supporting items, to prove the business is a going concern. These may include recent invoices, bank account statements, and others.
"Within the last 12 months, our average mortgage is approximately $600,000," Trail says. "No lender will advance that amount of money without being 100% comfortable with the situation."
This article was produced in partnership with STOREYS Custom Studio.
