Getting Started
Start a Financial File (Your “Green File”)
Before applying for a mortgage in Ontario, it’s important to organize your financial documents. Lenders will require a complete overview of your financial situation regardless of the type of mortgage you apply for.
A well-prepared file should include copies of:
- Recent pay stubs and employment letter
- Bank account statements
- Investment accounts (RRSPs, TFSAs, stocks, mutual funds)
- Credit card statements
- Vehicle loans or other debts
- Last 2 years of tax returns and Notices of Assessment (CRA)
- Details of any rental or investment properties (if applicable)
Having this information ready will help streamline the mortgage approval process.
Check Your Credit Score
In Canada, credit scores typically range from 300 to 900.
General benchmarks are:
- 650+ = generally acceptable for most lenders
- 680+ = strong credit profile (may qualify for better rates)
- 740+ = excellent credit (often preferred for premium mortgage rates)
Lenders in Ontario typically review your credit report through:
- Equifax Canada
- TransUnion Canada
It’s a good idea to check your credit early and speak with a mortgage professional if improvements are needed. Moving forward, treat your credit as a key financial asset.
Savings and Debt Management
When preparing to buy a home in Ontario, focus on building financial strength by:
- Saving for your down payment (minimum requirements vary by price)
- Preparing for closing costs (legal fees, land transfer tax, adjustments, inspections)
- Reducing high-interest debt (credit cards, personal loans, car loans)
Lower debt levels improve your borrowing capacity and mortgage eligibility.
Stay Financially Stable
Once you begin the mortgage approval process, stability is extremely important.
Try to avoid:
- Changing jobs or careers
- Taking on new loans or credit
- Making large purchases on credit (vehicles, furniture, etc.)
- Moving or transferring large sums of money without documentation
Lenders prefer consistent income, stable employment, and predictable financial behaviour.
Before making any major financial decisions, it’s best to consult with a mortgage professional to understand how it may impact your approval.
Important Insight
Even moderate monthly debt can significantly reduce your borrowing power.
For example, a $500 monthly debt payment (such as a car loan or credit card) could reduce your home-buying budget by a substantial amount, depending on interest rates and amortization.