There are a few life events associated with a mountain of paperwork: Death, taxes, and buying a home. When it comes to buying a home (as I learned this summer), the sheer amount of paperwork you must complete is mind boggling.
That said, there are plenty of resources available online to help you determine what documentation you need to provide your mortgage broker and real estate agent. Having these documents available beforehand will help your mortgage approval process go smoothly.
That was my plan. I shopped around for a mortgage broker who could provide me with the best mortgage rates, gathered my documentation, and thought I was ready. But there was still paperwork I hadn’t thought of, and securing it left me scrambling. Here are three documents I didn’t know I needed.
A letter from my employer
To get through the mortgage approval process, my mortgage broker required a variety of documents including a recent pay stub, 90 days of financial statements, and a letter from my employer stating my salary and certifying that I’m an employee.
Both my husband and I were unable to acquire this document as quickly as we wanted. First, my husband works for a large organization, and he had to go through several supervisors to get the letter written and signed off on by payroll. The letter wasn’t a priority for any of them, and it took longer than expected.
In my case, I work remotely for a small company, so acquiring this letter required my organization to courier this letter to my home, which is a province away. Couriering took longer than expected and I was left hanging without this documentation.
Home insurance questionnaire
When the seller accepts your offer to purchase, you need to provide proof of financing before the offer can be “firm.” Failing to do so will cause the offer to fall through and you could lose your deposit.
I knew going into the sale that I needed to provide proof of home insurance to receive financing approval, so I started shopping home insurance rates right away. What I didn’t know was what types of questions my insurance provider would ask me. I wrongly assumed it would be similar to acquiring tenant’s insurance (just some basic questions) and that would be that.
Unfortunately, my knowledge was lacking for several of the questions. I had to track down the answers from the seller and the home inspector. This due diligence delayed the process of obtaining home insurance by several days.
If I could do it again, I would have requested the questionnaire in advance.
A certified cheque
I had done all of my saving for my home down payment in my Tangerine bank accounts. I used a combination of my tax-free savings account and my RRSP. I intended to take advantage of Home Buyers’ Plan to withdraw from my RRSP, which took several weeks to process. Fortunately, I had an extended closing period so there was ample time.
What I hadn’t thought of was the fact that my entire down payment was at Tangerine—an online bank! I needed a certified cheque for my down payment and Tangerine didn’t have any branches so I couldn’t just show up at a branch and request one.
Tangerine does have a protocol in place for these situations: It couriers a certified cheque to your door. In my case, I was purchasing a home right around a national holiday, which meant this standard protocol would leave me with my cheque one day too late.
Fortunately, I had a workaround. I still maintain a chequing account at Scotiabank linked to my Tangerine bank account. I simply did an electronic funds transfer to my Scotiabank account and withdrew the money from a local branch.
Learn from my mistake—give yourself plenty of time to acquire your funds.