Roughly 20% of Canadians are self-employed. While many Canadians like to avoid this option because of the responsibility and perceived financial burdens, if you do your due diligence the process does not have to be complicated. If you are self-employed, you know how rewarding yet difficult it can be, especially when you’re trying to buy a home.
Banks tend to treat self-employed people differently than others when it comes to applying for mortgages, so if you’re self-employed we recommend getting help. The mortgage brokers at Regional Mortgage Group can help you go through the documentation and applications thoroughly so that you can get your self-employed mortgage approved.
One of the most common issues self-employed people have to manage is that banks don’t always recognize that their documented income is the net of expenses used to reduce overall taxable income. When considering you for a mortgage, the banks will look at your:
To verify these factors, the bank requires certain documentation. Some of the documents that you have to provide for the lender or bank are your most recent years of tax returns. As a self-employed person, your tax return may show a significantly lower income than what you actually take home based on tax deductions you’ve taken and other factors.
Based on the factors the bank considers when approving mortgages, the top 3 ways you can get rejected for a mortgage are:
To most easily wade through these difficulties and get your mortgage approved, you should schedule extra time with a mortgage professional when preparing to purchase a home. This extra time can mean months or even years depending on your financial situation. By allotting extra time to prepare, your mortgage professional at Regional Mortgage Group can help you strategize and avoid the headache that many self-employed individuals often face.
Contact Regional Mortgage Group
Regional Mortgage Group is affiliated with most financial institutions and deals with over 30 lenders. Our mortgage professionals can help you get the best rate, terms and conditions available to you in a hassle free process. And, in most cases, you get our advice for free because we are paid directly from the lender. To learn more about getting a self-employed mortgage, please give us a call.