Stratford Mortgage Broker

Self Employed Mortgages

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Mortgage for Self-Employed, Business for Self or Commissioned?

Mortgages are tough right now to qualify for when you are self-employed or commissioned. Even with a good credit history, getting a mortgage from a major bank is often frustrating as they want to see a two year average of your line 150 net income in order to qualify. With the new qualifying rules, having to qualify at the bench mark rate or 2% over, the higher of the two, its next to impossible for many Self-Employed people to Purchase, Refinance or anything else for that matter. Many Mortgage Companies do not offer stated income Mortgages any longer and if they do you need 35% down on your purchase or for Refinances they can only loan up to 65% of the value of your home. I know ridiculous right? You worked hard to build your business, have great credit and its next to impossible to take any equity out of your home affordably or qualify for a mortgage to purchase a home.

Over 20% of Canadian income earners are self employed, business for self or are 100% commissioned. With this large of a segment of the population working for themselves you would think the Banks in Canada + Government would be a little more accommodating. Most people in business write off expenses before declaring their income. That's the advantage of being in business for yourself. You pay income tax on a lesser amount but when you need to prove income for a mortgage approval, your tax returns make it look like your income is low and you can't afford the mortgage you deserve.

This year more so than ever I have been sending many of my Self-Employed clients to Alternate lenders, whom look at alternate proof of income such as 6-12 months of bank statements as well as reasonable stated income for their industry. Which these programs you can take out up to 80% of the equity in your home, refinance or purchase wtih 20% down.

So qualifying for a Self-Employed Mortgage is not easy these days but there are options that won't break the bank. You can purchase a new property or re-finance your existing home up to 80% of its appraised value. *Lower populations submit to lower loan to values.

General Requirements for a Self-Employed Mortgage:
A fairly reasonable credit history with minimal or no slow payments, collections etc.
Proof of self employed status through Incorporation papers, GST returns or business registration papers
Property must be located near a major urban centre *Lower populated centres considered on a case by case basis
The last 2 years Notice of Assessment (NOA) from Canada Revenue Agency to prove no tax owing
The last 2 years Full T1 Generals
The last 12 months of bank statements to show regular deposits to prove your 'stated income' as well as show you have paid your mortgage if applicable

We regularly deal with equity mortgage lenders and sub-prime mortgage lenders. We work with unique situations everyday, give us a call first!

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Toll Free: (866) 592-0516 Fax: (866) 407-5702 Mailing Address: 321-356 Ontario Street, Stratford, ON N5A 7X6