Self-Employed Mortgage

Self-Employed Mortgage

Being self-employed can pose a challenge when it comes to securing a mortgage. Traditional lenders tend to look the other way, as they don’t want to take the risk of lending to an individual that cannot declare their source of income. Don’t worry, the team at Good Advice for a Better Life can offer competitively priced mortgage solutions in Ontario for those who are self-employed.

Best Mortgage Rates

What is a Self-Employed Mortgage?

A self-employed mortgage is specifically made for borrowers who earn income from their own business rather than being a salaried employer. The significant difference between the two is that a self-employed person’s income is inconsistent, while a salaried person gets a consistent pay check each month.

It is not your traditional mortgage. It is a great financial tool for people who are sole proprietors. Furthermore, if you’re a self-employed individual that is incorporated, you must own the business or draw a salary or dividends to be considered self-employed. If you need help securing a self-employed mortgage in Ontario, speak with our team today. We will be more than happy to address any queries that you may have.

Self-Employed mortgage

How does one qualify for a Self-Employed mortgage?

The individual must have been the owner of the business for a minimum of at least two years. Moreover, the applicant will need to submit their tax returns of at least two to three years, including their proof of income alongside the mortgage application. If you get approved after the submitted documents and information has been validated, you will be able to enjoy the same mortgage products, as well as terms and rates the conventional mortgage borrowers would enjoy.

If you are a self-employed individual that has a poor credit history, you will need to pay a minimum of 10% as a down payment. For further enquiries, get in touch.

Types of Self-employed mortgages

Self-employed mortgages based on Income Declared:

Below mentioned are three types of self-employed mortgages based on the income declared:
  • Traditional Income
  • Non-traditional income
  • Stated income
  1. Traditional Income : Traditional income can be verified with the individual’s tax returns. This verification type is not a favourite for many self-employed people who are looking to confirm their real income.
  2. Non-Traditional Income : The applicant’s tax return is not a reflection of their actual income. It is the business’s bank and financial statements that are used to verify the real income. This category is where most self-employed individuals fall.
  3. Stated Income : Also known as “no income verification mortgages”, it is where the borrower cannot verify their income. This method of verification is usually accepted by “B” type lenders and private lenders.

Self-employed mortgage

Pros of getting a self-employed mortgage:

  1. Competitive rates : These mortgages are designed to help self-employed individuals achieve their dream of buying a home. If you can provide proof of enough stated income, secure insurance through the CHMC mortgage program or save up for a down payment, you can get access to competitive interest rates.
  2. Qualify for a much higher mortgage amount : If the lender you work with accepts stated-income mortgages, you stand a chance of getting approved for a higher amount than what you’d get from a traditional lender.
  3. Straightforward and quick approval process : With a traditional mortgage, you will need to wait for weeks, sometimes even months to get your application approved. However, with a stated-income mortgage, you can get approved in a matter of hours.
  4. Save money on taxes : With a self-employed mortgage, you can save on your taxes, and at the same time qualify for reasonable fixed and variable mortgage rates and terms.

Why Choose Good Advice For A Better Life For A Self Employed Mortgage?

With years of experience in the industry, we have built a solid relationship with several lenders across Ontario that can provide low rates and terms for self-employed individuals looking to apply for a loan.

Give us a call today at (289) 804-0857 to schedule a free, no-obligation consultation.