Imagine you are buying a piece of art created by likes of say Monet from someone who has a great story about how their ancestor was gifted this piece by the artist about 100 years ago. It looks great on the surface but a few key identifiers to distinguish the piece as an original are missing. The seller assures you it’s genuine and you should take him at his word. We’re talking $200,000+ here. Would you pay him the money? This is why provenance is a process used by all the big art houses to confirm the authenticity of a piece of art by a paper trail of ownership and other more recent creative means including DNA, video footage of the art being produced, carbon dating and laser analysis of the paint chemical compounds to name a few.
When it comes to mortgage lending we’re talking about the same dollar values or more. With mortgage fraud on the rise around the world and especially in a nice secure country like Canada we are now faced with the same requirements to prove our personal and financial provenance so to speak.
When obtaining a mortgage today it is incumbent upon the client and mortgage agent to demonstrate where the client derives their income from. It is very common place for a Lender to search various social / web platforms to determine if the client even exists. The more you share the better (in many cases). Complete personal and business income documents are required upfront before a commitment is issued. Be prepared for several stages of paperwork to be requested based on the review of the original documents provided as questions are bound to be raised.
It is also a requirement of all the G7 countries to prove the source of funds used for down payments toward any mortgage transactions. This includes providing the source of any deposits (gift, business or other) made to source accounts within 90 days of the mortgage transaction.
In short today’s lending landscape is much different than ever before. What I learned in 2018 was that in order to most efficiently help you achieve your financial goals we must develop a really solid provenance package for the Lender to be able to turn around a quick approval.
For more on this topic and more, reach out to me. I’m Lisa Holly and I’m “Approving Dreams Daily”.