self employed mortgage

Self Employed Mortgages: How To Get Approved

In June 21, 2018

Over the years it’s been quite difficult for self employed home owners or self employed home buyers to get approved for a mortgage. The days of the “stated income program”, where a business owner can simply sign a stated income declaration form and write that he or she earns a certain amount of income annually, without proving it, are behind us.  Even when the banks were approving stated income mortgages for self employed borrowers, you were required to put 35% down paymentWhat Is A Down Payment? A down payment is the monies a home buyer puts towards purchasing a property. In many cases, the down payment is a minimum of 5% and can be greater. Often times, the home buyer will borrower the remainder of the purchase price as mortgage, which the lender will register the mortgage charge as security on the property. Down Payment Requirements Institutionally, a down payment cannot come for borrowed funds with repayment terms. Banks and lender are governed by anti-money laundering regulations which they must comply with to verify the source of a borrower's down payme... More for a purchase to avoid CMHC or Genworth default insurance. For any down payment amount less than 35%, the borrower’s default insurance premium was almost double the amount of the standard default insurance, for verifiable income borrowers.

Unfortunately, for self employed borrowers, the Canadian Government and major banks, have made it nearly impossible for business owners to get approved for a mortgage, as they are not declaring their true income on their tax filing, due to business expenses claimed and write-offs, which brings their income to a very low amount.

How To Get Approved For A Mortgage If You Are Self Employed

ApprovedThere are still options with institution lenders for self employed home owners or self employed home buyers to get a mortgage approval, with a competitive interest rate, while not declaring a high amount of income on their T1 Generals & Notice of Assessments.

The Bank Statement Mortgage Program enables self employed applicants to purchase their dream home, refinance their mortgage, consolidate their debts into a mortgage and access their home equityWhat Is Home Equity? Home equity is money available in a home, and calculated as property value minus mortgage balance(s), including line of credits and liens. For example if a property is valued at $500,000 and the home owner(s) have a total mortgage balance of $300,000, then the home equity available is $200,000. What Is A Home Equity Loan? A home equity loan is a mortgage loan that is approved based on home equity. Traditionally, for home equity loans, income and credit are not considered for qualifying as the qualification is based on the equity in the home. Home equity lenders will,... More, by using their bank statements for approval, instead of their tax returns.

How The Self Employed Bank Statement Mortgage Program Works

Simply provide us with your 3 or 6 months business bank statement history, to show your deposits. We will get you qualified by annualizing your bank statement cash flow, and deposits to qualify you for a mortgage.

Example: If your total deposits sum to $10,000 each month, for the last 3 months ($30,000 in 3 months), we will multiple $30,000 by 4 (total 12 months), and your effective income to qualify you for a mortgage will be $120,000.

Self Employed Mortgage Program Requirements

  • 3 to 6 Months Business Bank Statements
  • Business Licence or Articles Of Incorporation
  • 20% Home Equity or Down Payment
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