Self Employed
Entrepreneurs can qualify for a mortgage without proof of income.
Did you know that 18% of Canada’s labour force comprise of workers who are self-employed in one form or another? The definition of self-employed includes small-business owners (a business that employs less than 50 people), full-commission sales, and contractors. Due to the entrepreneurial spirit of many Canadians, the number of people working business for self is projected to increase in the future.
In the past, extending a mortgage to a self-employed worker was considered risky to the banks. However, due to the increasing number of people choosing the path of self-employment, banks can no longer ignore the fact that mortgage policies need to be changed in order to make home-ownership easier for the self employed.
You Only Need 2 years of Proof
Today, with confirmation of 2 full years of self-employed status, a self-employed individual that cannot provide traditional income verification is able to purchase a property with a down payment as little as 5% provided the buyer will be living in the home. Refinances of existing properties are eligible up to a loan to value of 90%. The loan to value is the relationship between the property value and mortgage balance outstanding.
Don’t Have 2 years of Proof? No Problem!
If you don’t have a 2 year history of being self-employed, no problem. As long as you have been working in the same industry for the past 2 years, even if you are self-employed for only one day, there are mortgage options for you. Keep in mind that whether you are a sole proprietorship, partnership or corporation, the one piece of paper that will undoubtedly be required is your most recent Notice of Assessment confirming no income taxes owing.