A wide range of mortgage options to business owners with tax write-offs.
Mortgage Specialist Heidi Hamano offers one stop service for a wide rage of mortgages.
Based on a recent survey, it appears that nearly 20% of all income earners in Canada are self-employed (including part-time). We recognize challenges this growing demographic faces when it comes to qualifying for a mortgage. For the most part, the issue is that their claimed income is less than what they make by deducting as much expenses as possible to minimize their tax payment.
In order to qualify for a self-employed mortgage, most lenders require that personal tax Notices of Assessment along with T1 General from the past 2 years be included with their mortgage application. Those who can provide the proof of income while meeting the credit score requirement can generally access the same mortgage products and rates as traditional borrowers. Other self-employed borrowers who are unable to prove enough income must have a good credit history and provide a minimum down payment of 10%.
In addition to your income verification documents, other supporting documents required by a lender to prove your business may include:
- Business License
- GST statement
- Article of incorporation
- Proof of your down payment coming from own source
For those who can prove income through their income tax document, mortgage insurance works the same for a traditional mortgage: pay a premium according to a down payment between 5 and 19.9%. If you are putting down 20% down payment or more, purchasing a mortgage insurance is waved.
Other self-employed borrowers whose proof of income does not debt service an amount of mortgage needed, must put down at least 10%, and find a lender offering the Self-employed program under mortgage default insurers. The following link can provide insurance premium rates for self-employed stated income files.
Using a mortgage broker
Seeking assistance from a mortgage professional is an advantage to secure a mortgage under a more favorable approval process and condition. Mortgage professionals have access to multiple lenders that offer self-employed programs and updated knowledge of the mortgage industry.