1. The first chat
It starts with a conversation, with a bank or a mortgage broker. You talk about the home you want, what you earn, what you owe, and how much you've saved. No forms yet.
2. Pre-approval
The lender looks at your money to work out the most it would lend you, and at what rate1. It checks your credit, and asks for papers like these1:
- ID.
- Proof of your job and pay, like a recent pay stub.
- Proof you have the down payment and closing costs.
- What else you own, and what you owe.
- If you're self-employed: two years of tax notices from the Canada Revenue Agency.
Every file is different. These are the usual papers, not a complete list. What a lender asks for depends on the lender and on your situation, so it changes from person to person. For example, if you work for yourself, earn commission or bonuses, have rental income, or family is helping with your down payment, you may be asked for more. Ask your lender or broker for their own list early, so you have time to gather everything.
Employed or self-employed?
Either way, the lender wants to see that your income is real and that it will keep coming. What changes is how you show it.
| Employed | Self-employed | |
|---|---|---|
| Proof of pay | A recent pay stub1 | Your tax notices (Notices of Assessment) from the Canada Revenue Agency for the past 2 years1, often with your full tax returns and your business income statement3 |
| Proof of the job | Your position with your employer1 | Proof your business exists and how long it's run, like a business licence, GST/HST returns or business bank statements3 |
| How long | How long you've worked for your employer1 | About 2 years in business, or in the same line of work, is recommended3 |
| Income used | Your salary or hourly pay1 | The income on your tax returns, after business expenses. Some lenders may add part of it back3 |
Why it matters if you work for yourself: business expenses you claim lower your tax, but they also lower the income the lender sees. Less income on paper means a smaller mortgage. If you've run your business for less than 2 years, you can still qualify, but expect more questions about your savings, your contracts and your work history3.
Many lenders will hold that rate for you for 60 to 130 days1. A pre-approval is a "probably yes", not a final yes. The lender can still say no later, for example if the home doesn't meet its rules1.
3. Find a home and make an offer
Your offer usually has conditions: it only goes ahead if your mortgage is approved, and if the home inspection is OK. You get a few days to clear them.
4. Apply for real
Now you send the lender your accepted offer. They check everything again, including the stress test from GDS and TDS.
5. The appraisal
The lender checks that the home is worth what you're paying.
6. Insurance, if you put down less than 20%
The lender sends your file to a mortgage insurer. Insured vs uninsured explains how that works.
7. Approval
You get a commitment letter with the rate and terms. You sign it, then tell the seller your financing condition is cleared.
8. The lawyer (or notary in Quebec)
You give your lawyer the rest of the price (your down payment) plus your closing costs2. They also check the home really belongs to the seller, and you sign the mortgage papers with them. Your lender will usually want proof of home insurance before closing.
9. Closing day
The lender sends the mortgage money to your lawyer. Your lawyer pays the seller, registers the home in your name, and gives you the keys2.
10. After you move in
Your first payment is usually about a month later. Check how much you can pay off early each year without a penalty, in case you get extra money.
Try it. The affordability calculator shows what you could borrow, and the payment calculator shows what you'd pay each month.