Why mortgage lenders ask for proof of Mortgage Assets when applying for a mortgage?
Mortgage Assets show your net worth and allows a lenders to get a better picture of how you will make your mortgage payments, down payment and closing costs.
In addition to considering your employment history and income, the lender will also consider whether you have any additional assets that you could convert into cash. That’s because these assets provide you with a potential source of cash flow in case of a job disruption or job loss – could you stay afloat for a few months?
What are considered Mortgage Assets?
- Savings/ Chequing Account Balances.
- Investments (RRSP, TFSA, Bonds, Mutual Funds, etc.).
- Life Insurance (Private & Work).
- Pensions.
- Vehicles.
- Properties Owned.
What Information will you need to provide for Assets?
- Investments/ Savings/ RRSP/ TFSA/ Pension/ Life Insurance: Institutions Name, Type of Investment, Approximate Value.
- Vehicles: Make/ Model, Year, Approximate Value.
Generally the lenders do not ask for supporting documents on Assets unless they are being used for Down Payment and Closing Costs. Required Supporting Documents:
- 90-day bank History showing available funds.
- Must show your name, Account Number and Full 90-day History.
- Nothing can be edited or Blanked out.
- If moving funds from Investments accounts to general accounts you must show a 90-day history for each account following the funds from one account to another.
What are the general requirements to qualify for homeowner mortgage loan insurance?
Find out which requirements you must meet to qualify for CMHC’s Homeowner Mortgage Loan Insurance. Here