Did you know there were about 2.6 million self-employed Canadians as of February 2020? If you’re part of the statistics, you are already aware of the numerous benefits that being your own boss offers. Unfortunately, self-employment also comes with its fair share of disadvantages. For example, it may be more difficult for self-employed people to secure a mortgage compared to salaried workers.
However, “difficult” doesn’t mean “impossible.” With proper guidance, you can get a mortgage in Canada without stress. If you’re eager to learn how, you’ve come to the right place. Here, you’ll learn all you need to know about getting a mortgage as a self-employed borrower.
Let’s get started.
What Is A Self-Employed Mortgage?
As the term implies, a self-employed mortgage is for borrowers who run their own businesses. Self-employed individuals (sole-proprietors, partners, and corporation owners) don’t survive on fixed employment income like workers in third-party organizations. So, they must make do with whatever they get from their business’s profit.
Unfortunately, this means that their net income can be unpredictable and fall short of the requirements for traditional mortgages. Self-employed mortgages take account of such income fluctuations to provide a flexible payment structure for lenders.
There are different self-employed mortgage options you may explore; they include:
- Stated income mortgages
- Sagen-business for self (alt.a)
- "A" lenders
- "B" lenders
- Private lenders
How Do I Qualify for a Self-Employed Mortgage in Canada?
Are There Any Advantages of Getting Self-Employed Mortgages?
- Competitive Rates - Self-employed mortgages are tailor-suited to your finances. Once you meet CMHC's requirements and provide an adequate stated income or down payment, you're good to go.
- Higher Mortgage Amounts - Lenders who accept stated income may give you higher mortgage amounts than traditional mortgages.
- Efficient Approval Process - Generally, it takes less time to get stated income mortgages than traditional ones. They're also cost-effective as you can save money on taxes.
Should I Speak with an Experienced Mortgage Broker?
One of the fool-proof ways to qualify for a self-employed mortgage without stress is through a trusted mortgage broker. They are professionals with all the best knowledge of self-employed mortgages. So they’re the perfect people to turn to for mortgage advice and guidance.
Your mortgage broker will start by evaluating your needs and drawing up strategies and documentation that suit you best. With a competent mortgage agent, you’ll have access to numerous products from various lenders. This means that you won’t run out of options and have a better chance of finding the perfect one. You’ll also avoid handling all the complicated paperwork alone that sometimes comes with self employed mortgages.
The Bottom Line
Getting a mortgage as a self-employed Canadian comes with unique sets of challenges. However, you shouldn’t let the pitfalls get in your way of becoming a proud property owner. With a trusted mortgage broker’s help, you can get the best deals hassle free and make well informed decisions whether you purchase, refinance, or transfer your mortgage.
So, why not make that life-changing call to your mortgage broker this minute? You’ll be glad you did.
