Lenders determine affordability by looking at your Gross Debt Service ratio (GDS)

and your Total Debt Service ratio (TDS). The GDS ratio is based on what you can afford to pay each month. This includes mortgage payments, taxes and heating. The maximum GDS ratio is 32%. The TDS ratio includes everything covered under GDS plus all your other financial obligations. The max-imum TDS ratio is 37% (40% if you require a CMHC insured mortgage).

To determine what you can afford to fi-nance, your lender will need a variety of documentation from you. The documenta-tion required may vary by lender, but below is a list of the documentation that is often asked for. Being prepared in advance with this information will make shopping for a mortgage a more efficient process.

YOU WILL NEED:• Copy of the Contract of Purchase and Sale

(provided by your Realtor)

• Property disclosure (provided by your Realtor)

• Listing (provided by your Realtor)

• Certificate of Title (provided by your Realtor)

• If the home you purchasing is a strata condominium, the minutes of the strata meetings for the last 12 months are required, including the minutes from the AGM and a Form B (provided by the Realtor)

• If the strata condominium complex has undergone remediation, the Engineer’s Report signing off on the remediation, Final Occupancy Certificate and the warranty are required.

DOCUMENTATION FOR LENDERS

• If the purchase is a rental, we need any rental agreements (provided by Realtor)

• Proof of down payment may include 3 months of bank statements or a copy of a recent investment statement (provided by borrower)

• If you are separated or divorced, a copy of the separation agreement or Divorce Decree, showing no continuing liabilities (provided by borrower)

• Picture ID (provided by borrower)

• Survey Certificate or Title Insurance, to be provided to a lawyer

• An appraisal may be required.

EMPLOYMENT

If you have regular full-time employment, lenders generally require that you have a minimum of 6 months with your current employer or 6 months with similar experience. You should be past the probation period (if your employer has this). Two of the following are generally required to verify your income:

• 3 months of bank statements showing consistent direct deposits to a financial institution;

• A current pay stub showing year-to-date earnings, employer’s name, your name or SIN number

• Notice of Assessment from Revenue Canada (income tax) for the most recent year—possibly a T4 slip if before April.

• An employment letter, showing the employer’s name, your name, SIN number, earnings, length of employment and issue date.

If you are self-employed (minimum of two years of experience), you will need to provide:

• Last two years T1 General tax form and your personal Notice of Assessment. Use an average of line 150 income. Some lenders will permit you to add up to 15% back to your net income.

In summary, the items below may be asked of you at any time throughout the mortgage approval process. Be sure that you have them easily accessible. All requested documentation must be received and accepted at least 10 days prior to funding.

COURTESY OF

HOLMES REALTY2481 BEACON AVE.SIDNEY, BC V8L1X9

250.656.09111.877.656.0911

MICHELESTEAM@HOLMESREALTY.COM

WWW.HOLMESREALTY.COM © Copyright 2015 Holmes Realty Ltd. All rights reserved.

DOCUMENTATION CHECKLIST � Contract of Purchase and Sale (firm offer, all signatures, all pages)

� Property Disclosure

� MLS listing

� Appraisal: FULL or DRIVE BY or CMHC

� 2 recent pay stubs showing year-to-date earnings

� Employment letter stating start date, salary, hours worked and status (full-time, part-time, casual, on-call)

� Bank statements showing a 90 day history of down payment and closing costs

� Gift letter from family member

� Bank statement showing gifted funds in account

� 1 year of bank statements showing no NSF activity and a positive cash flow

� Notice of Assessment (Revenue Canada)

� Tax returns for the last 2 years

� Financial statements for the last 2 years

� If self-employed, proof of business (GST/HST return, corporate return, corporate bureau and business license)

� Most recent credit card/loan statements (if to be paid out)

� Lawyer information

� VOID cheque

� Signed mortgage application

� Signed mortgage approval

� Signed Client Agreement, Form 10 (Conflict of Interest Disclosure Statement) and BC Disclosure

� Signed MPP (mortgage protection plan) acceptance or waiver

� Identification