• Why is my mortgage lender asking for my NOA (notice of assessment)?

    December 12, 2020
  • Why is my mortgage lender asking for my NOA (notice of assessment)?

    Some mortgage lenders will ask to see your Notice of Assessment mainly to see how much income you declared to the CRA, and to see how much you owe(d) in income tax. It is especially common for them to ask for your NOAs when you are self employed or part time. The reason is that for full time permanent employees, the employer will generally withhold sufficient taxes at the source, so it is less common for the employee to owe large amounts to the CRA. As for the income of a full time employee, this is generally verified with paystubs, letters of employment, and sometimes T4 slips.

    If you do owe money to the CRA, they will for proof that it is paid off prior to providing the mortgage. The reason for this is that the CRA is first in line when it comes to collecting. If you don’t make your payments, they will force you to sell your home and the CRA will get paid first. Whatever is left over goes to property taxes, then the bank.

    Proof that your income taxes are paid can be obtained with a statement of account from the CRA (you can access it online) and/or a receipt of payment.

    The first think I look at when an NOA is provided is the income at the top, and the amount owing (or credit) at the bottom!

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