By Pam Pikkert

Red Deer Express

In October of last year, one branch of the government made one round of changes and another branch followed suit and did the same.

The first branch introduced the stress test which means all Canadians purchasing a home with less than 20% down have to qualify at a rate of 4.64% though the rate they are actually offered is much lower as of today.

It also changed how conventional, or mortgages with more the 20% down, are dealt with on the mortgage default insurance side which has meant those mortgages actually have higher interest rates now.

The second branch dealt more with the underwriting guidelines and level of documentation required.

It is not just your imagination. Mortgages are much harder to get and you have to provide even more paperwork than ever before.

The reasoning is basically that when a bank or mortgage provider gets audited, they will be able to show they did the due diligence necessary to ensure the mortgage is affordable to the borrower. If there is a foreclosure, they have to verify they crossed all the t’s or they may not be able to claim the mortgage default insurance.

So what exactly will you have to provide to get your approval? Let’s take a look shall we?

1. Letter(s) of Employment

2. Recent paystub(s)

3. Two most recent Years Notice of Assessments from the CRA.

4. A 90-day history of any and all accounts you are using to make up the down payment.

5. Void cheque

6. Government issued ID

If you are self-employed you will also need:

1. Two years T1 generals

2. Two years financial statements

Specialty documentation you may need depending on your situation:

1. Divorce/separation agreement

2. Bankruptcy discharge documents

3. Proof of debts/collections paid

4. Proof of taxes paid

5. Mortgage statement and offer to purchase on your current home.

6. Lease agreements, mortgage statements, property tax bills on any rentals.

There can actually be more but this is a pretty good start.

Everyone is being asked for the same things as you so please do not take it personally. If I was lending someone $300,000 I would want to know I would get my money back and if that didn’t happen that the insurance I have would be there to cover my losses. Have a great week!

Pam Pikkert is a mortgage broker with Dominion Lending Centres – Regional Mortgage Group in Red Deer.