A co-signer for a mortgage is technically a co-applicant, and the terms can be used interchangeably. To be a co-signer on a mortgage, you have to add all your information to the mortgage application and your income, liabilities and credit strength factor into the mortgage approval process. You also have to be on the title of the property being mortgaged as a legal owner (though your percentage of ownership can be as little as 1%).
The advantage of being a co-signer is that you have legal rights to the property and your name is on the mortgage contract. You can therefore request information from the mortgage lender at your discretion, and the property cannot be sold without your permission.
The disadvantage to being a co-signer is that the mortgage debt and monthly payments count against you if you later are applying for any other borrowing (purchasing other properties, vehicle loans, etc). There are also tax implications to consider: for example, when the property is sold there can be capital gains taxes payable on the appreciation in value (based on your percentage of ownership), since you as a co-signer it is typically not your primary residence.
Being a co-signer is sometimes compared against being a guarantor on a mortgage, which is a less secure position. See Guarantor for more information.
A mortgage commitment is a document where the lender agrees to lend the borrow money under a set of specified conditions. The conditions usually include things like receiving income verification (employment letter, pay stubs, tax information), appraisal, copies of MLS listing, proof of down payment etc.
A mortgage where the mortgage amount is 80% of the property value or less. Because the borrower has at least 20% equity in the property, these mortgages are considered lower risk and do not typically require mortgage insurance.
If a mortgage amount is greater than 80% of the property value, it is called a High Ratio Mortgage and requires default insurance.
The Proof of Income Statement is a document you can print out from the CRA My Account website. It is a detailed version of the Notice of Assessment (NOA) document and is accepted by many lenders as an alternative to the NOA.
To print the Proof of Income Statement, follow the steps below:
1. Login to CRA (http://www.cra-arc.gc.ca/myaccount/)
2. Click the “Proof of income statement (option ‘C’ print)” link under the “Related services” section in the bottom right corner.
Click the Proof of income statement (option ‘C’ print) link in the Relates services box.
You will then be asked which Tax year you would like to generate. Use the drop down to select the year and click Next. Typically, your mortgage lender will want to see your two most recent NOAs, so select the most recent year, print it, then come back and print the previous year.
Select the desired tax year and click the Next button.
When the “Proof of Income” for the selected year opens up, it will look like the image below.
Press the Print button to generate a paper copy to bring in, or the Open PDF button if you’d like to save the PDF file and submit it electronically.
The online version will look a little bit different than the one CRA sends in the mail (shown above), but it contains the same key information.
The lender will require the full Assessment document, so please be sure you print all the pages and keep them in the proper order.
If your Proof of Income Statement shows you have a balancing owing for your most recent tax year (a debit or DR balance), please also print your CRA Statement of Account to show the balance has been paid. You can find instructions for printing your CRA Statement of Account here.
The Statement of Account is a document you can print out from the CRA My Account website. It is a detailed transaction listing showing charges and payments made to/from your CRA account, resulting in your current balance.
Lenders will need your Statement of Account if your Notice of Assessment shows a debit (DR) balance, because this means at the time you filed your taxes you owed additional money to CRA. If you paid your taxes owing after filing, the Statement of Account will show that your taxes are paid and your balance is $0.
To print the Statement of Account, follow the steps below:
Credit Karma is a free credit monitoring service that shows your Trans Union Credit Score, and that won’t have a negative impact on your credit score when you use it to check your credit. They are a ‘recommendation’ business, so they do make money by referring you to certain credit card and loan offers – however you do not have to take any of the offers or recommendations to use the credit monitoring service.
In order to print off your Trans Union Credit Report for free from Credit Karma, first create your account at www.creditkarma.ca and log in.
In the menu across the top, click the “Today” link and then print that page (or save it as a PDF). We are most interested in the “Your Score” section and the “Your TransUnion Credit Report – Accounts” section.
The deposit is a sum of money paid by a purchaser to their realtor or solicitor’s trust account, usually when they have successfully negotiated a purchase agreement or sometimes due within 24 or 48 hours of signing the subject removal (when the contract of purchase becomes firm and binding). These funds are held in trust until the closing of the transaction, at which point they are given to the seller’s solicitor and become part of the overall purchase funds needed to complete the transaction.
As the purchaser, you will typically pay the deposit by a personal cheque or bank draft made out to your realtor or solicitor. Before you hand over the cheque, please take a photo or scan of the cheque (or ask your realtor or lawyer to give you a photocopy). Also, please ask for a receipt from your realtor or solicitor confirming they have received the deposit money in case you need to provide this as part of your mortgage qualification.
