A credit score is not always the key, meaning if you have a great credit score but not a lot of activity the banks will question why. I like to call credit a necessary evil. You need to have it and you need to use it but mainly you need to respect it. Things not to do when it comes to your credit are always to pay your bill on time and only use your available credit to 75% if you have it at a limit or close will also impact your application. When providing your income, I see a lot of people putting a rent payment to them in other income from a close relation living with them, or boyfriend or girlfriend that is helping pay the rent on their application. We cannot use any of this income because it’s not guaranteed or claimed on your taxes. Some exceptions to this rule are if you have a rental unit in your home and you have signed a lease and proof of deposits to your account for rent payment; this also must be a unit, not a room. Child tax credit or support payments must be proven as well, for child tax we will need your CRA statement and for support, you need to have a court order and proof of the deposits as verbal agree-
ments are not always accepted as this is not guaranteed. Tips and under-the-table income are also not accepted unless it is claimed on your income taxes. No one can escape the government when applying for a mortgage and you can also have no back taxes owed either. Credit and income are the two most valuable things on a mortgage application. So, what happens when you finally have an accepted offer? This is where the fun starts in my opinion. You need to prove all the above meaning, we need your notice of assessment (NOA) for the past two years, your T4, bank statements, letter of employment, and pay stubs; and if you send in old stubs and bank statements you will get them back along with a request to send the your most recent and redacted bank statements or balance screenshots are not accepted as we need to see line by line history. I will be honest that most of my clients find this the most frustrating part, but a mortgage is a lot dif - ferent from a car loan, or any loan for that matter. Consider this, if you were asked to lend hundreds of thousands of dollars wouldn’t you want to know everything about the person who is asking? Well, the banks feel the same way.
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JULY/AUGUST 2022 • SPOTLIGHT ON BUSINESS MAGAZINE
SPOTLIGHT ON BUSINESS MAGAZINE • JULY/AUGUST 2022
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