Despite the growing numbers of self-employed Canadians, the self-employed find it more difficult to obtain a mortgage than those who work for a salary. Traditional lenders make it very difficult for the self-employed to get a mortgage as they consider them a higher risk. More than 20% of Canadians are self-employed.
You may be wondering what your chances are of successfully getting a mortgage if you’re self-employed. Despite the fact that there is a significant amount of self-employed people with a stable income they still encounter difficulties when seeking out a mortgage. Self-employed individuals are faced with more strict rules and treated based on the type and amount of their income. Banks and other private lenders want to feel confident that they will get their money back when dealing with someone who is self-employed
They have less ways of authenticating the stability of the income so as a result they create more strict rules to protect themselves. With Toronto Mortgage Brokerage there will be no issues because we are not biased towards self-employed individuals! Due our expertise and knowledge in the field, we can easily assess your situation and make it possible for you to obtain a mortgage even if you cannot prove the consistency of your income in a conventional way.
three years before they will even consider giving you a loan. If you are able to produce these, you can negotiate the same terms as those in regular employment. The debt to income ratios, down payment and credit requirements of the self-employed in these instances, are treated in exactly the same way as the employed.
In addition to the tax assessments, traditional Toronto banks will require a number of other business documents. These will include business financial statements, your credit score, financial planning and proof of business ownership amongst others.
If you are self-employed Certified Mortgage Brokers Toronto can team you with the lender that offers the best rates for the self-employed. We have a list of established investors with whom we partner.
Although many banks don’t recognize it we know that your tax assessment probably does not correctly reflect your income. Most savvy businessmen will fully utilize their allowable tax-deductible expenses. In this way, net income is reduced meaning that you qualify for a lower mortgage or you may not qualify at all.
The lower declared income will also have a negative effect on the debt to income ratio which represents the percentage of income that you use to service your debts. Some private lenders may allow certain expenses to be written back when calculating the debt to income ratio.
Because of your lower net income, your Toronto mortgage broker may suggest that you use mortgage products that allow “stated income”. You are likely to pay more interest, but declaring higher income and then paying additional tax, will probably cost you more.
Stated income is calculated as income that you could reasonably expect to earn in a business of your size in your industry.
If you know that you will be seeking finance in the future you could plan ahead and ensure that you receive the best rates available
...pick the one thats right for you.
|HELOC||4.2% (prime + 0.25%)|
First National Financial
Street Capital Bank
|5 year variable||1.7% (prime - 0.35%)|
|3 year variable||2.6% (prime + 0.15%)|
|Line of Credit||Starting at 3.00%|
|Equity Loans||Starting at 5.99%|
|Private Mortgages||Starting at 5.99%|
Speak to one of our qualified mortgage experts that will guide you in the right direction. Usually as a self-employed person when you go to the bank to obtain a mortgage, you have to go out of your way and take extensive measures by: improving your credit score, offering a huge down payment, showing history of work, savings accounts and providing many other documents. These steps all make sense and are in some way part of the procedure when you want to improve your chances of getting a loan, but we make it much faster and simpler than any bank out there.
At Toronto Mortgage Brokerage we will personalize your mortgage, whether it is for refinancing, buying or transferring to achieve the best results possible.
You have worked hard to achieve success in your field of work so you should be entitled to a great mortgage as well! We appreciate the value of hard work so please contact us to book a free consultation.
I had to port a mortgage to a new condo, Leon had excellent knowledge to get me through the approval process. When the bank made an error, Leon was quick to contact them to make sure everything was done right and on time. He is very professional and courteous and I recommend his service to anyone who wishes to apply for a mortgage.
Giving them 5/5 stars. Massoud helped me with my mortgage and he never missed a beat. He made the process very straightforward as a first time home buyer. Shopped around for other mortgages but he was always the first to get things for me. Highly recommend him
I was looking to renew my mortgage and my previous lender was less than willing to do anything to keep my business. So I started to look for another brokerage to do business with and Certified Mortgage Broker stood out purely based on my interactions with Massoud. Massoud was professional and clearly had a keen sense of customer service; which I make a high priority when doing business with anyone since I'm in the customer service business myself. Peter rolled out the red carpet for me, walked me through my options, inquired about my plans with my current property, give me opinions and facts about rentals in the area, sales/purchases. In some respects he gave me more information about real estate than my real estate agent has!
Selling and buying a home is a stressful experience and Leon with CMB in North York took all of the stress out of arranging the financing. He was very professional and clear about what I needed to provide to him. He used this information to arrange the best mortgage option on our new home, arranged the bridge loan to cover the closing period differential, and arranged closing out the mortgage with the previous lender.. Our experience with Leon is far better than the local in-person brokers that we contacted previously and Leon has helped us with a mortgage renewal in the past with the same excellent experience.
Leon returned my called from a missed call within 15 minutes of my call and I left no message. Leon and his team were fantastic. Even with the money issues we had Leon made me feel important and valued as a person.
…by providing award winning customer service to each and every single client.
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