Thursday, October 30, 2014

Need a Mortgage? But you are Self-Employed?

What you need to know if you are Self Employed and want to qualify for a mortgage to buy a home.

If you are self-employed or a business owner, you may be surprised to find that getting a mortgage, without the conventional documents, is not a simple process.
 In the past 3 years mortgage rules have been tightened numerous times.  As a result mortgage borrowers are not only required to supply more documents than before but the criteria to qualify for a mortgage has increased.  This is especially the case for those who have their own businesses and don’t have the typical documentation required.

Here are some items you need to have or be aware of when you apply for a mortgage.
  • CRA Notices of Assessment – These are generally used to determine what your income has been over the last 2 to 3 years. 
  • Proof of Business for Self for 2 years – Business Licenses, Certificate of Incorporation and Articles, GST returns, T1 Generals showing business income, etc
  • Down Payment - Sometimes Self-Employed applicants require a min of 10% down payment and up to 35% down for stated income deals with no client premiums. 
  • Good Credit – You can keep your credit score healthy by paying bills on time and minimizing your number of loans and credit cards.
  • On time tax filing – Ensuring that your tax returns are filed on time and that taxes owning are paid will help create a positive picture of your finances. Personal and business taxes.
  • Mortgage Insurance - for the self-employed or business owners, the mortgage insurance rates at which you will qualify will vary several percentage points between those who have proof of income and those without.
  • Seek Advice – Getting a mortgage is a complicated process.  Work with a mortgage professional to ensure you get a great mortgage product.
Sample of a Notice of Assessment, Business License and Certificate of Incorporation.

Testimonials from Self Employed Clients:

As a mortgage professional, I help clients every day to get a mortgage they can afford and at great rates.  If you are unsure whether you can prove your income, talk to me and I can help simplify the process and explain everything you need to know.  Don’t hesitate to contact me for a meeting.