Initiating the Pre-Approval phase in a mortgage application necessitates the compilation of crucial documents. These initial documents play a pivotal role in kickstarting the process:

1. Income Documents: Validating Financial Stability

Income documentation forms the bedrock of a mortgage application, showcasing your financial capacity. Essential income documents include:

• Pay Stubs: Recent pay stubs offering a snapshot of your regular income.

• Employment Verification: Letters from employers validating your current job status and income.

• Tax Returns and T4 Forms: Providing a comprehensive overview of your income history over the past few years.

2. Proof of Down Payment: Demonstrating Financial Commitment

Equally important is evidence of your down payment, signifying your commitment to the purchase:

• Bank Statements: Statements showcasing your savings or investment accounts from which the down payment will be sourced.

• Gift Letters (if applicable): Documentation confirming any financial gifts received for the down payment, along with evidence of the giver's financial capacity.

• Property Value and Mortgage Statement: Many borrowers have most or all of their down payment in their current home that they are planning to sell. In this case, borrowers will need to provide some type of evidence of current property value such as a recent appraisal or tax assessment and a current mortgage statement showing the existing balance owing. This helps the mortgage broker to determine approximately how much equity the borrowers have in their existing home that can be used for down payment on the new home purchase.

Navigating the Pre-Approval Process

Submitting these initial documents—proof of income and evidence of the down payment—sets the wheels in motion for your mortgage Pre-Approval. These documents paint a preliminary picture of your financial stability and commitment, laying the groundwork for further assessment by lenders.

Remember, accuracy and completeness in providing these initial documents are paramount. Additionally, consulting with a mortgage broker can offer valuable guidance tailored to your specific financial situation, streamlining the Pre-Approval process.