- Income Qualifications and Supporting Documentation required; when you are obtaining a mortgage for the first time, you will need to provide specific documentation in regards to your employment situation. For salaried individuals, typically an employment letter, recent pay stub, and 2 years notice of assessments are usually enough. If you are self-employed, the lender will require 2 years notice of assessments, 2 years T1 GENERALS (tax returns), and company financial statements for the last 2 years if incorporated. Typically some documents are asked for such as: 2 years statements of business account, articles of incorporation, and business license.
- Appraisal; An appraisal is performed by an appraiser who is a licensed, regulated professional who will come and evaluate the price of your new home. Most lenders that you go with will request this as they want to confirm the purchase offer price is in line with what the property is actually worth. This is not a cost that is covered by your lender and it must come out of pocket. The typical appraisal ranges from $300-$500 dollars, depending on the size of the property and what is being assessed. We [the mortgage brokers] contact the appraisal company on your behalf to schedule a time. Typically from there, the appraiser will contact the real estate agent who is the listing agent for that property to schedule a time to appraise the property.
In regards to determining what usually dictates the need for an appraisal are the following: If your mortgage is high ratio [down payment is less than 20%], then no appraisal is typically required. If your mortgage is conventional [20% down payment or more], then typically it is required. Self-employed individuals and properties bought as rentals always typically require an appraisal as well.