T1 General vs NOA: What Lenders Care About for Self-Employed Mortgages

If you’re self-employed and thinking about applying for a mortgage, you’ve probably heard lenders talk about T1 General and Notice of Assessment (NOA). But what do they actually care about, and why do these documents matter more than your bank statements or cash flow? Let’s break it down in simple terms.

What is a T1 General and a NOA?

T1 General is the main tax form you submit to the Canada Revenue Agency (CRA) every year. It shows your total income, expenses, and deductions. Essentially, it’s your full tax return.

Notice of Assessment (NOA), on the other hand, is the CRA’s confirmation that they have processed your tax return. It shows the final numbers after deductions, credits, and adjustments. Think of it as the CRA’s stamp of approval on your T1 General.

Why lenders care about T1 General vs NOA

When you’re self-employed, lenders want to see proof that your income is stable, consistent, and officially reported. That’s why both T1 General and NOA are required in most mortgage applications.

• T1 General: Shows all your income, business deductions, and expenses. It gives lenders context about your overall financial situation.

• NOA: Confirms that the income you reported is officially recognized by the CRA. It’s the document lenders often rely on most when calculating qualifying income.

Banks usually average your net income over the last two years from your NOAs. They may also cross-check it against your T1 General to ensure there aren’t any major discrepancies.

T1 General vs NOA: What lenders care about for mortgage qualification

For self-employed borrowers, the focus is on net income reported on the NOA, not your gross revenue. Lenders also look at:

• Consistency between T1 General and NOA

• Any unusual write-offs that may affect qualifying income

• Proof of ongoing business activity

So while your T1 General shows the details, the NOA is often the document that really matters when banks calculate how much mortgage you can afford.

Key Takeaways

1. T1 General gives the full story of your income and expenses.

2. NOA confirms your income officially and is critical for mortgage qualification.

3. Lenders focus on net income reported on the NOA, but they’ll often check both documents.

4. Accurate, consistent reporting between your T1 General and NOA can make the mortgage process smoother.

Understanding the difference between T1 General vs NOA can save you time, frustration, and potentially even money when applying for a mortgage as a self-employed borrower.