Anytime a purchase as large as a new home is considered, it’s critical to have accurate and available documentation every step of the way. Understanding which documents to prepare and where you can find them will make the pre-sale process less challenging and more efficient for any homebuyer.
As each purchase and mortgage is different, the documentation required to satisfy your mortgage broker and appropriately document the sale may vary. Start with the documents outlined below and know that additional documentation may be required depending on your specific situation. Some of these are required to close the sale, and some are just smart to keep on hand.
Information to provide your mortgage broker
Mortgage-related documents will be the first you should secure in the pre-sale process. The earlier in the sale you can provide these documents to your mortgage broker, the better. First, you’ll want to gather documents that verify your income. If you are employed, this would likely include:
- Letter of employment: a letter from your employer on company letterhead that confirms your name, start date, position, salary (or guaranteed hours per week and hourly rate), along with contact information for verification
- Paystubs: this helps to confirm the information on your letter of employment
- T4 slips: typically, the last two years’ worth
If you are self-employed, your broker will likely ask for three years of financial statements and three years of Notice of Assessments which help to establish your annual income.
Next you will need documentation to verify your down payment availability. Usually, 90 days of bank statements are required. If part of your down payment is coming from your RRSPs, you’ll need to show a 90-day history of your RRSP account as well. If some of the down payment is coming from a gifted sum, you’ll need a letter signed by yourself and the gift-giver, along with corresponding deposit information. If your down payment is coming from the sale of another property, you’ll need to provide an Agreement of Purchase and Sale that indicates the sale price along with a current mortgage statement.
Your broker will ask for documentation of the listing details of your pre-sale home and a Purchase and Sales Agreement which includes all amendments if applicable. To speed things up, bring a void bank cheque or pre-authorized debit form from the account that your mortgage payments will come out of.
Documenting your realtor agreement
While the following documents won’t be requested during the purchase, you’ll want to ensure they are completed correctly and that you have copies in a safe place. When you began your pre-sale hunt, you likely chose a realtor and signed a Buyer’s Agent Agreement, which states that the agent is representing you in the purchase of your pre-sale home. This agreement outlines the specifics of what your agent will provide you, such as the length of engagement, the terms of termination, and who pays the agent’s commission. In the case of a pre-sale purchase, frequently this commission will come from the seller, not the homebuyer, and it’s important your Buyer’s Agent Agreement reflects that.
One of the most important pieces of all is the Purchase and Sales Agreement. This is a legally binding and detailed contract between the homebuyer and the seller. It contains the purchase price, closing date, and all other terms of sale. This one is particularly important to understand and have on hand as the duties outlined must be followed to the letter by both parties.
Your closing company is required by law to keep a record of your closing documents, so that’s a good fallback in case you misplace yours. Still, it’s smart for the homebuyer to have access to important documents at all times.
Easy document organization
MLA Homeowner Portal supports document organization as a one-stop, online platform where all homeownership documents can be saved to and downloaded from at any time. The Homeowner Portal makes it simple to keep track of all the above documentation, so it never gets lost. In addition to holding useful documents, the Homeowner Portal allows homebuyers to log in from anywhere at any time to observe their pre-sale’s progress and access informative online resources. With an easy online completion checklist, homebuyers will understand what steps are required to close on their purchase and what stage their purchase is at. MLA Homeowner Portal empowers homebuyers by providing in-depth access to tracking the status of their new home purchase, with real-time construction updates.
By showcasing different project elements, including project status, contract information, and homebuyer documents, MLA Homeowner Portal is a great tool for pre-sale homebuyers who want to know which documents to prepare and where to find them. Homeowners can easily visualize and safely document their pre-sale purchase, from ground breaking to move-in.