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How to prove your income

By
Mortgage and Lending with Anderson Associates Mortgage Brokers M08000605

What type of documentation is required to prove your income?  Depending on the type and source of your income, the answer to this question is different.  Here is a guideline you should follow so you are prepared when it comes time to arranging your mortgage:

If you are a salaried or hourly employee - Provide an employment letter confirming your position with the company, the date you started and your income.  Make sure the letter is dated and signed.  Also provide a copy of a recent pay stub.

If you would like to include overtime and/or bonus and/or commission income to help you qualify - In addition to the above documentation, you need to provide a two-year history of your income.  This is because your income may vary from year to year:  Some lenders want to see your last two years NOA's (Notice of Assessment), and others will use your last two years T4s.

If you are self-employed - Provide a copy of your NOA for the past 2 years, provide a copy of your income tax return (T1 General) for the past 2 years and provide a copy of your business financial statements for the past 2 years.

If you earn 100% commission income - Provide an employment letter and pay stub (see above) along with a two-year history of your income (see above).

If you work part time - Provide an employment letter and pay stub (see above) along with a two-year history of your income (see above).

If you are employed on a contract basis - Follow the instructions for a commissioned income employee above.

If you earn rental income - Provide a copy of all leases along with a copy of your income tax return for the past 2 years.

If you would like to include alimony/child support to help you qualify - Provide a copy of your Separation Agreement along with a copy of your income tax return for the past 2 years.

With the level of fraud that goes on in the industry today, and not to mention the current financial crises we're in, the banks are not flexible on their documentation policy.  Make sure you are ready with your docs and your mortgage application process will go smoothly.

Comments (2)

Blair Anderson
Anderson Associates Mortgage Brokers - Hamilton, ON

Thanks Courtney!

Nov 10, 2015 02:33 AM