Income Guidelines
Where a borrower is employed regular full-time or permanent part-time with a guaranteed number of hours or fixed salary, obtain one of the following:
- Pay stub accompanied by the most recent Notice of Assessment (“NOA”), T4, or 3 month history of direct payroll deposit.
- Current Employment Letter accompanied by the most recent NOA, T4, or 3-month history of direct payroll deposit.
Part-time borrowers without minimum guaranteed hours must meet variable employed income standards.
Where employment income includes income from variable sources, use the average income over the last 2 years period and for declining income, use the lessor of the two years.
Collect a pay stub and one of the following:
- 2 years T1 General and corresponding NOAs
- 2 years T4
For employed borrowers where the most recent T1 General or T4 is not available, we may accept their prior year’s year-end pay stub.
Use the last 2 years average of income for all self-employed income types. Where year over year income declines, use the lower income for qualification purposes.
Sole Proprietor and Partnership
- Coast Capital must verify sole proprietor and partnership income via the last 2 years of T1 Generals and corresponding NOAs.
- Coast Capital permits a 15% gross up of the borrower’s net business income. Coast Capital does not permit add backs.
- For partnerships, verify the percentage of ownership amongst all partners.
Incorporated
- Verify income of the owner of an incorporated business via their last 2 years T1 Generals and corresponding NOAs and obtain the last 2 years financial statements or the last 2 years Corporate T2s including the General Index of Financial Information (GIFI) and corresponding Corporate NOA.
- Financial Statements to confirm the income showing on the NOA is consistent with what is paid out by company, and that it is sustainable
For the employed portion of the borrower’s seasonal income, obtain the following:
- Pay stub
- Last 2 years T1 Generals or 2 years T4s and corresponding NOAs
If the borrower is currently receiving EI, obtain the last pay stub the borrower received.
For the EI portion of the borrower’s seasonal income, obtain the following:
- Last 2 years T1 Generals and the corresponding NOAs or last 2 years T4Es.
- Most recent EI stub or 3 months of direct payroll deposit (if currently receiving EI).
Determine the borrower’s average income from both employed and EI sources over the 2 years period. Where either income stream declines year over year, use the lower value of the average or current income.
Coast Capital considers the following disability income types for qualification purposes.
Permanent Disability Income
- Where a borrowers source of repayment is a permanent disability benefit, employee obtain the following documentation:
- A letter from the employer or benefits provider confirming the benefit is permanent.
- Most recent benefit statement or 3 months direct deposit history.
Where a permanently disabled borrower also receives Canada Pension Plan (“CPP”), refer to pension income guidelines.
Long Term Disability Income
- Where a borrowers source of repayment is a long term disability benefit, obtain the following documentation:
- A letter from the employer or benefits provider confirming the benefit is long-term status.
- Most recent benefit statement or 3 months direct deposit history.
Collect any two of the following:
- T4A
- Pension benefit statement
- Most recent NOA
- 3 months direct pension deposit
Exclude the Guaranteed Income Supplement (GIS) from the debt servicing calculation.
Where borrowers rely on a pension from a foreign nation, verify the pension by obtaining a current bank statement and the borrowers most recent T1 General and corresponding NOA.
Support income encompasses both child support and alimony.
Obtain a copy of the borrower’s court order or separation agreement accompanied by 6 months deposit history. Where 6 months history of deposits is not available, we may use a borrower’s alimony or support if the court registry stamp is evident on the court order or the separation agreement is notarized.
The amount of support used in an application must not exceed 50% of the total qualifying income.
The party paying the support will need to include 100% of the payment as part of their debt obligations in the application.
Coast Capital uses 100% of the return to work income for borrowers on parental leave. Obtain the following documentation:
- A letter of employment confirming their regular salary, position and expected return to work date.
Where using a value higher than the regular salary taken from the employment letter, obtain the borrower’s last 2 years T1 Generals or T4s and corresponding NOA.
- Kitchen with a fridge and stove
- Bathroom
- Private entrance
Rental Income – Non-Subject
Add the rental income/loss to an application from non-subject revenue property using the following calculation:
Revenue Property – Rental Income Analysis
Gross Monthly Rental Income – (Principal + Interest + Property tax + Heat* + 50% of Strata + Vacancy Allowance + Maintenance Allowance) = Net Rental Gain/Loss
The rental income analysis (“RIA”) must use the lower of the borrower’s stated or verified rental income.
The vacancy allowance is 5% of the gross monthly rental Income.
The property maintenance allowance is the greater of 15% of the gross monthly rental income or actual maintenance cost as reflected in the T1 for debt servicing.
* Include heat in the RIA calculation when the tenant does not pay for the heat bill.
Rental Income – Subject Revenue Property
Add up to 80% of the gross rental income to gross employment income for a subject Rental Property to calculate debt service. Must include heating cost in TDS when the tenant does not pay for the heating cost.
We can consider depending on the age of the children and the overall application.
Income Letter
OR
Contract from the Ministry
AND
Current Pay Stub or 3 months Direct Deposit
- The letter from the Ministry of Social Services must confirm tenure and current status
- Caregivers must have at least two years’ experience as foster parent.
- Maximum number of children should not exceed six (including any of their own children)
- The applicants must live on site
- Income cannot be ‘grossed up’
Foster care income does not include the use of specialized care income (caring for disabled individuals or elderly).
Average all investment income types over the last 2 years. Where a borrower’s investment income declines year over year, use the lower value for qualification.
Interest/Dividend/RIF: Obtain the borrower’s last 2 years T1 Generals and corresponding NOAs accompanied by verification of the asset supporting the income.