Are You Self-Employed? Mortgage Basics You Need to Know  Running your own business and being self-employed has plenty of benefits. From being your own boss to tax write-offs – there are many reasons why millions of Canadians have chosen this lifestyle. Yet there are some setbacks that you need to be aware of when being self-employed. Financing your mortgage can be one of those challenges but with several options available to you, finding the right mortgage can be easy once you know the basics.

Traditional Options

If you are self-employed, you can still apply to traditional financial institutions by using a two-year average of your annual net income (after taxes). Some lenders will also allow you to add a portion of your tax write-offs back into your earnings, to help boost your income level. This is great if you have been self-employed for longer than two years and have had excellent credit, but this isn’t always the case for most – especially if you are a new startup, or run a business whose income is not exactly straightforward.

Alternative Lending Options

If you’re having an issue getting a mortgage or have been denied, you can look outside of the traditional lenders and towards private mortgage lending options. Alternative lenders take the whole picture into consideration, such as your history in the industry, and 12-month bank statements that can help prove sufficient cash flow to support a mortgage.

Application Process

Make sure to properly organize your financial documents and be prepared to answer questions about your business. Common inquiries include the type of business you operate, your annual gross revenue, and the industry you operate in. Having any relevant business document that can prove the legitimacy of your business will also be required. Be ready to present your business license, any audited financial statements, the articles of incorporation, and your T1 documents and notice of assessments for the past two years. The more information that you can provide about your financial status and capability to repay the mortgage the better.

If you are self-employed and ready to buy a home, reach out to VERICO The Financial Forum Ltd. Our mortgage agents can help with explaining your options when applying as a self-employed borrower. They also can assist you with your loan applications and with arranging the right loan for your needs. We can also help with mortgage renewal and refinancing for self-employed borrowers. Mortgage brokers are in the know, and have access to a broad lender network with a range of innovative of products. The requirements for each lender varies, so having someone on your side can really help you get the best option for your investment goals.

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