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Apr 21 Self-Employed? Here Are Some Tips for On Your Next Mortgage

Posted by: AdminS

Mortgages for Self-Employed Homeowners Not As Straight-forward as Years Past:

Genworth Canada, a mortgage insurer, has designed an ‘Alt A’ program for self-employed borrowers who have proven they can responsibly manage their credit obligations and finances and have done so over a 2 year period. Typically, borrowers who are eligible for this program are small business owners for a minimum of two years who can prove their ownership through a third-party ‘arms-length’ document. Applicants looking at this ‘Alt A’ program are able to submit a stated income amount in order to qualify for a mortgage – this self-reported amount will have to be reasonable based on the nature and size of the business and the amount of years the business has been in operation.

Information that you may require or may be asked of you:

• Revenue created in a year by the company’s business operations – this includes services rendered or goods sold, prior to any deductions or expenses for goods sold. This information is useful when trying to establish potential size of the business and potential income level available for personal income.

• Notice of Assessment Income (Line 150)

• Your most recent years’ income total for the year

• Your Profession or Industry Type

• Specifics about your profession and your industry to help determine how reasonable it may be for you to carry your mortgage.

• Specifics around whether your business primarily deals with business-to-consumer (B2C) transactions or business-to-business transactions and the nature of these transactions.

• Insight into the durability of the business or any seasonality in your business

• Business Type: (Sole Proprietor, Partnership or Incorporated/Limited Company and Percentage Ownership)

• Your interest/percentage ownership in the business (i.e. partnership 50% ownership, incorporated 35% ownership, etc.)?

• What extent are you entitled to both the assets and profits of the business?

While this does not cover everything that may be asked of you as a self-employed homeowner looking for a mortgage; it does prepare you as to the type of information that lenders are looking for in today’s market.

As banking rules and regulations change and continue to evolve, it becomes increasingly important to speak with a Mortgage Expert who can properly prepare you and set up the right expectations to get the mortgage product you need.

If you’re self-employed and are looking to refinance or purchase a new home, fill out the contact form in the top right of this page to speak with a MonsterMortgage.ca Expert today!

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