As a business owner or entrepreneur, getting a mortgage while being self-employed can be tough. Most lenders require proof of steady income, and solid employment history, which can be a challenge to prove if you are self-employed.
But don't worry, there are options for getting a mortgage if you are self-employed, and we are here to help.
CVE Mortgage Group specializes in providing self-employed Canadians with tailored mortgage solutions that fit their unique needs and requirements. Let us help you find the perfect self-employed mortgage today.
Here's a few benefits of our self-employed mortgage program:
Flexible Qualification: Our mortgage programs have more flexible qualification requirements that cater to unique financial situations.
Competitive Rates: We offer competitive rates that are comparable to traditional mortgages.
Faster Approval: Our self-employed mortgage programs have faster approval times, so you can get the financing you need more quickly
Allow CVE Mortgage Group to help you find the right lenders that specialize in self-employed mortgages with the most favorable terms. Take advantage of our broad knowledge of the mortgage market, and get a personalized service that caters to your specific needs.
Self-employed mortgages are designed for borrowers who rely on income from their self-employment or business, rather than traditional employment income. As a self-employed individual, your income may differ from those with regular employment, and self-employed mortgages take into account these differences, resulting in different requirements compared to traditional mortgages.
Self-employment encompasses a range of business structures, including sole proprietorships, partnerships, and corporations. In 2022, close to 15% of Canada's workforce was self-employed, meaning that there are a lot of Canadians in need of self-employed mortgages.
When evaluating a traditional mortgage application, lenders consider the net income declared on the borrower's tax return. However, for self-employed Canadians, this amount may be lower due to tax deductions and business expenses. With a self-employed mortgage, borrowers have more flexibility in reporting their income, allowing for a more accurate assessment of their financial situation.
You could qualify to borrow up to 95% of the home's value if you have mortgage default insurance. However, without insurance, you can only borrow up to 80%. Self-employed borrowers face the same debt service ratio limits as traditional borrowers. For CMHC insurance, these limits comprise a maximum Gross Debt Service (GDS) of 39% and a maximum Total Debt Service (TDS) of 44%.
There is no fixed rule that self-employed mortgage rates must be higher than standard mortgage rates. As with any mortgage, borrowers with stronger financial profiles are more likely to obtain lower mortgage rates. Self-employed borrowers with mortgage default insurance may qualify for rates as low as those offered by other insured mortgages.
While lenders typically prefer to see a minimum of two years of self-employment income, it is still possible to obtain a mortgage as a recently self-employed borrower. Obtaining a mortgage as a new self-employed individual can be more demanding and may require extra documentation to qualify.
Yes, it is possible to obtain a self-employed mortgage without providing proof of income with some mortgage programs. However, borrowers must often make a minimum down payment and work with a lender that is affiliated with one of these insurers. It's important to note that CMHC-insured mortgages for self-employed borrowers require proof of income.
Compared to a salaried or hourly full-time employee, it can be more stressful and challenging to get a mortgage if you are self-employed, particularly when dealing with banks. Lenders typically require self-employed borrowers to provide documentation regarding their income, net worth, credit score, and more. As self-employed individuals do not receive a T4, they must submit a Stated Income Application, which some banks may not accept.
Yes, you can get pre-approved for a mortgage if you're self-employed. In fact, it's a good idea to get pre-approved before you start house hunting so you know how much you can afford and what your interest rate will be.