Conditions Precedent to Advance
If you have received an MCAP mortgage commitment and are looking for information about how to fulfill the conditions listed in Special Conditions Precedent to Advance, this section will provide you with the assistance required.
Mandatory Documentation for all mortgages includes the signed commitment with all schedules along with the completed Pre-Authorized Debit (PAD) Agreement, within 5-business days of the commitment date.
Please note that it is essential you meet all required conditions as listed in your commitment in order for MCAP to ensure your mortgage closes as scheduled.
How are you Compensated?
Salary/Hourly - You are paid a base salary on an annual basis or receive an hourly rate. We will require a letter from your employer on company letterhead stating your start date, position and minimum salary. We also require a current pay stub. If your mortgage was approved on the basis of you providing minimal income confirmation (Stated Income Program), you need to provide a letter of employment confirming your start date and position along with your most recent Notice of Assessment that confirms no income tax arrears.
Commission - Your pay structure is solely commission based. We will require a letter from your employer on company letterhead stating your start date and position along with your Notice of Assessment for the last two years that confirms your income.
Business for Self - You work for yourself rather than an employer and are drawing income from a trade or business you operate personally. We will require Personal Tax Assessment Notices for the last two years confirming your income as well as financial statements from the business for those same two years. If your mortgage is an insured deal with Genworth or CMHC (see your commitment to confirm), we will require 2 years Notice of Assessment confirming your income as well as one of the following:
If your deal was approved on the basis of you providing minimal income confirmation (Stated Income Program), you will be required to provide one of the following to confirm a minimum of two years business for self:
In addition to one of the above, we will also require your last year's Notice of Assessment that confirms no income tax arrears.
Pension - You are receiving pension via a government source such as Canada Pension Plan and/or Old Age Security. You may also be receiving income from a company you were previously employed with and have since retired from. We will require your T4A for the most recent tax year or 3 months bank statements confirming automatic deposits.
Do you Receive Income NOT Listed Above?
Car Allowance - Your employer provides you a car allowance as part of your annual earnings. We will require a letter from your employer confirming that the car allowance is a taxable income as well as your T4 from last year to confirm.
Non-Taxable - You are receiving disability income provided by either a private insurer or the government and are guaranteed this income for life. Or you qualify under the Indian Act exemption for employment income or Non-taxable pension income. We will require one of the following confirming your annual income is non-taxable income:
Bonus/Overtime - You receive pay for hours worked in addition to your standard workweek and/or your company pays you bonuses based on the work you have done. We will require your job letter and T4s for the last two years or Notice of Assessment for the past two years confirming your average net income.
Other Income - You work part time and your hours are not guaranteed or you are an employee whom is paid based on piecework or mileage driven. We will require a letter from your employer stating your start date and position as well as your Notice of Assessment for the last two years confirming an average income.
Investment - You receive income from investments that you would like to use to help you qualify for a mortgage at MCAP. To use this income, you must demonstrate that this income has been received for 2 years and that the asset is unlikely to be liquidated. We will require your Notice of Assessment for the last two years confirming an average income.
Relocation - You are being transferred or relocated by your current employer. We will require a copy of your relocation letter or current pay stub confirming your annual salary. If bonus or commission income is included, a copy of your last two years Notice of Assessment or T4s to demonstrate a two-year average will also be required.
Rental Income - MCAP will use 80% rental offsets to qualify conventional owner occupied subject properties with a rental suite as well as subject rental properties. 50% of the rental income will be added to the applicant's gross income for other rental properties as well as high ratio owner occupied suites and subject rentals.
Down Payment Documentation
Where is Your Down Payment Coming From?
Savings or Investments - Your down payment is coming from a source(s) such as savings and investments, GIC deposits, RRSP, or Canada Savings Bonds. We will require confirmation of non-borrowed funds showing accumulation of 3 months via bank statements/book.
Gift from Immediate Family Member - You have received a gift from an immediate family member. We will accept gifted down payment as long as the gift is from your parent, grandparent, child or sibling and we have confirmation that the funds have been deposited into your bank account. If your deal was approved on the basis that you were providing minimal income confirmation (Stated Income Program), gifted down payment is not allowed. If you are purchasing this property as an investment property and will not be occupying it yourself, gifted down payment is not acceptable.
Proceeds from the Sale of an Existing Property - You are selling or have sold a property and are using the money received from that sale towards the purchase of this property. Your solicitor must provide a statement confirming the net proceeds that you are entitled to.
Property Valuation Documentation
How Does MCAP Know How Much your Property is Worth?
The value of your property is based on its current state. Depending on this amount, MCAP will lend you funds relevant to that specific value. In order to be sure we have a fair and accurate evaluation, we usually get a third party appraiser to conduct an appraisal. This means that someone may be calling you to arrange a time to view the property. Please try and accommodate these requests, as they will only speed up the process of your mortgage.