Why is Getting a Self-Employed Mortgage So Difficult?
These days more and more Canadians are working for themselves. In fact, nearly 20% of Canadians are self-employed on at least a part-time basis. With such a large percentage of the population working for themselves, you wouldn’t think that it would be so difficult for these earners to get a mortgage. But it often is.
One of the advantages of being self-employed, is that you can take advantage of a lot of tax deductions and write-offs. When it comes to getting a mortgage however, this is a double edged sword because it reduced your income considerably – at least on paper.
With traditional lenders, a lower income means qualifying for a lower mortgage – or maybe not qualifying at all. Even if you have qualified for a mortgage in the past or if you are now in a better financial situation, it does not mean that you’ll necessarily be able to qualify for a mortgage with a traditional lender now.
Remember, that mortgage rules for federally regulated lenders have gotten much stricter in the past few years. This has made it tougher to get self-employed mortgage through traditional channels such as the major banks.
Fortunately, there are lenders who specialize in providing self-employed mortgages. These lenders look at the bigger picture and not just your tax returns.
How do you qualify for a self-employed mortgage?
Generally, in order to qualify for a self-employed mortgage, you are going to need a lot more documentation than you would to qualify for a regular mortgage.
Some of the documents that may be required by your lender will include:
• Six months’ worth of bank statements.
• Information about your business including business license number and/or articles of incorporation.
• Contracts and/or invoices.
• Other supporting documentation such as proof that your HST is paid up.
Where can I get a self-employed mortgage?
While it is possible to seek out a lender on your own for a self-employed mortgage, the best course of action is to sit down with a professional mortgage broker. Mortgage brokers literally have access to dozens of lenders and they know which ones are the most reputable and which ones specialize in self-employed mortgages.
If you are self-employed and are looking for a mortgage, contact the team at 1ONEFUND Financial today. One of our agents would be happy to assess your situation and recommend the best course of action for you.