What do I need to get a mortgage if I am self-employed?

If you are self-employed, getting a mortgage can be trickier than if you are simply a T4 employee. In Canada, self-employed individuals enjoy many benefits including being able to write more things off their taxes. And while this results in immediate savings on your taxes, it can have other consequences. When you have a lot of tax write-offs, your income is lower – at least on paper. This makes it harder for lenders to give you a mortgage. Even though you may in reality be making good money, the paperwork says otherwise. 

Fortunately, there are lenders out there that specialize in mortgages for entrepreneurs. Typically lenders view self-employed individuals as higher risk and as a result, mortgages for entrepreneurs usually cost a little more than mortgages for T4 employees. 

Even with the higher cost of mortgages for entrepreneurs however, the trade-off of have more tax write-offs is generally worth it. 

What are the mortgage requirements when you are self-employed?

The process of applying for a mortgage when you are self-employed isn’t much different than the process for T4 employees. The quote process and the application are almost identical. The down payment and credit requirements are also similar.

Where entrepreneurs and T4 employees differ the most in the mortgage application process is the document requirements which are much more rigorous if you are self-employed.

Entrepreneurs who are applying for a mortgage require more extensive documentation such as financial statements that have been prepared by a certified accountant, Notice of Assessment, and information about the business (such as whether it is a sole proprietorship, corporation, etc.).

What can self-employed individuals do to improve their chances of getting a mortgage?

The first thing you should do if you are self-employed and looking for a mortgage is to sit down with a professional mortgage broker who can help you find the right lender and advise you on the exact documentation that you will need to gather. 

Beyond that, if you are self-employed, it is important that you keep your credit in good health by always making at least the minimum payments on any loans and making those payments on time. It is also beneficial if you save up as large a down payment for your future home as you can. 

Call Matrix Mortgage Global today.

If you are looking to get a self-employed mortgage, we can help. Contact the team at Matrix Mortgage Global to set up an appointment.