Why can employees easily obtain a mortgage but you as an employer or business owner have challenges or limitations? Here are a few reasons;
- You may have multiple “write offs” on your tax return that reduces your net taxable income that can be used to qualify
- You don’t have the higher credit score required by some lenders and/or default insurer (for less than 20% down payment)
- No guarantee of a consistent income week after week
- 30% of businesses fail in the first 5 years
- You haven’t had your own business long enough to show to the lender that you will make it
- You haven’t filed your tax returns for a few years or owe CRA
These reasons make the lenders nervous/anxious about handing over a mortgage for hundreds of thousands of dollars… even though they have your home as a failsafe.
We help self-employed clients by either;
- Providing recommendations with a clearly laid out plan that may include waiting until your business is more well established, having a larger down payment, fixing your credit rating, getting CRA up to date to name a few;
- Or, we have lenders that even though you are self-employed, can offer solutions… here are some of those solutions…
- Add Backs and Grossing Up; We at GTA BEST MORTGAGE will analyze your tax returns and in some cases able to increase your taxable and verifiable income by adding back some of your write offs or increasing your taxable income by as much as 15%… This may be enough to qualify under normal guidelines with no penalties anymore!
- Stated Income Mortgage; this is where the lender fully understands the self-employed income dilemma and will accept you simply “stating” an income on your application without having to go through showing net taxable income on your tax return to prove it. The interest rates and/or fees/default insurance premium are based on your credit rating and available down payment but are sometimes a little higher than a more traditional mortgage
- Combination Mortgage; it may be possible that the only way to qualify now is to consider a first and second mortgage combination with some cases being as little as 10% down payment
- Add a Guarantor or Co-Applicant; for example, you have a family member that is prepared to sign for the mortgage with you; the family member has to have excellent credit and income. After a period of 12 months, we can apply to the lender to have the family member removed from the mortgage and the title of the property, leaving it in your name.
Non Verifiable Income
You may receive income and money each month that possibly falls into one of the following scenarios;
- You are self-employed and have a lot of cash income that you just don’t declare
- Under the table income that cannot be used
- Support that is not officially documented
- Any other form of miscellaneous funds….
We help clients by either;
- Providing recommendations where this income source can be used to qualify
- Or, we have lenders that may consider these sources of income depending on your down payment and/or credit score
- Or add a Co-Borrower or Co-Applicant
Get advice from the experts including mortgage broker, real estate agent, home inspector, appraiser, lawyer etc. You deserve to have the best mortgage rates. We at GTA BEST MORTGAGE will make sure you get all the help you need to get started! And finally… enjoy the experience of buying your home!