Lenders are going to want some very detailed information to determine whether or not they can approve you for a mortgage. Some of the things they will ask about, and look for verification of, include:

• Record of employment for all applicants
• Record of residential history for all applicants
• Credit history for all applicants
• Downpayment you are bringing to the deal, and its source
• Current income and debt load to determine your net worth
• Details on the property being purchased

To qualify for a mortgage you need to pass the Five C's. They are as follows:

• Character
• Capital
• Capacity
• Collateral
• Credit

Character attributes include:

• Residence stability
• Job stability
• Net worth
• Old enough to have experience with debt
• Young enough to outlive the mortgage

Capital is an important part of a mortgage and includes:

• Size of down payment (0% +)
• Source of down payment
• 3 months of bank statements showing accumulation with names and account #’s
• If sale of property, then an unconditional sale agreement must be produced

Capacity :

• Usually dictated by CMHC guidelines
• Gross debt service (GDS) of 32%
• Total debt service (TDS) of 40%
• TDS can go up to 45% or even 50%
• Some lenders do NOT use GDS or TDS at all

Collateral:

• Collateral is the value of property
• Different lenders have different criteria
• Some lenders will not lend for:
• Different locations
• Mobile homes
• Apartment condos
• Usually it involves having the property appraised (cost about $200.00+)

Credit:

• Credit bureaus are checked
• Beacon scores of 600-630 and up are good
• R1s are the best
• R9s are the worst