FAQS FOR SELF-EMPLOYED HOMEBUYERS

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FAQS FOR SELF-EMPLOYED HOMEBUYERS
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• Working for yourself can be hugely rewarding, and
  millions of Canadians are happily self-employed.
  However, when it comes to buying a home, it can
  make getting approval for a home loan all the
  more difficult, as the major banks require
  borrowers to have secure, stable and long-term
  employment, and on average, require at least 2
  years of income statements to qualify.
• So, if youre a self-employed Canadian, what can
  you do to secure a mortgage?

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• Not sure quite who qualifies as self-employed?
• Contractors, freelancers or entrepreneurs who
  issue invoices instead of pay stubs, are
  self-employed. While there is no such thing as a
  separate mortgage for self-employed individuals,
  typically they must take a longer, more complex
  path towards applying for, and being given a
  mortgage, in comparison to a standard, payroll
  employee.

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• What must you do to qualify for a mortgage as a
  self-employed person?
• With self-employed people, their gross earnings
  are treated differently to those of salaried
  employees lenders will only use 80 of your
  gross earnings and the average of last tax years
  income for commissioned sales people, and net
  income, instead of gross income, for
  self-employed individuals. The CMCH or Canada
  Mortgage and Housing Corporation, restricts
  lenders to use only the last three years of
  self-employment income.

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• What do the rules say is a qualifying income?
• Mortgages are usually obtained by self-employed
  individuals through stated income (how much you
  claim you earn) applications, and these need a
  signed income declaration and proof of
  self-employment. If most of your income is kept
  within your company, you may be able to qualify a
  mortgage using the gross deposit of business
  income over the last year, or allowing for
  retained earnings within your corporation.

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• What income documents must the self-employed
  provide for a mortgage application?
• Youll need to provide your chosen lender with
  your last two years of full T1 Generals and the
  following associated notices of assessment
• For those who are incorporated, youll need to
  provide your whole articles of incorporation
• For those who are sole proprietors, youll need
  to provide your business or HST registration
• Your last six months of bank account statements

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• If self-employed, how long must you have been in
  business to qualify for a mortgage?
• In general, lenders ask for proof of earnings
  from at least the last two years, although they
  sometimes make exceptions for certain
  professionals such as doctors and engineers, or
  for anyone starting a new business in the same
  industry in which they previously worked and
  enjoyed a lengthy career in.
• Can you still qualify for a mortgage if your
  business has a seasonal or irregular income?
• Yes, you can the requirements related to income
  are no different than if you earned a full-year
  income.

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• If youre struggling to make sense of the many
  requirements needed as a self-employed mortgage
  applicant, why not seek help from a professional
  mortgage broker? With their experience and
  expertise, they can help you make sense of it all
  and find a lender who may view you more favorably.

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• Red Key Mortgage is located in Calgary, Alberta.
  We are a boutique brokerage with high volume
  serving hundreds of clients locally and
  nationwide every year. We have a number of
  associates dealing in mortgages as licensed by
  the Real Estate Council of Alberta. Being a
  calgary mortgage specialist, Red Key Mortgage,
  will provide all of your available options from
  the entire mortgage market and allow you to make
  an educated decision where you'd like your
  mortgage to go. Red Key Mortgage works with big
  banks in Canada, as well as over a dozen other
  AAA lenders. Best of all, our services are paid
  for by the lenders at no additional cost to our
  clients. If you are looking for 2nd mortgage in
  calgary, contact us today! We can't wait to get
  started.