Did you know that more Canadians became self-employed between the years 2020 – 2022 than in any 2 consecutive years prior? Can you spot the correlation? It probably comes as no surprise that the Covid-19 pandemic presented a magnitude of work opportunities for Canadians and their families.
Self Employed Mortgage Ontario:
As a result, the demand for self employed mortgages in Ontario has grown rapidly. For a long time, there has been a misconception about the difficulty or obstacles of self employed mortgages. Many business for self individuals considered the idea of getting a mortgage to be unachievable given the limited income declared on their taxes. Simply put, there are many self employed mortgage solutions available without the need for tax documents – solutions that have been available for many years.
Mortgage for Self Employed Applicants – How it Works?
For a self employed mortgage, you do need proof of income, but not in the traditional sense. Here is a list of items typically asked for by banks and lenders to prove income for ‘business for self mortgages’:
- Articles of incorporation, HST # or Master business license
- 6 – 12 months of business bank statements (or personal bank statements if sole proprietor)
- A few invoices to match income deposits (or contracts, etc.)
- A stated income letter (a template is usually provided by each bank)
Did you notice that we made no mention of tax documents? That’s because many lenders don’t require business tax documents to qualify income for a self employed mortgage in Canada. (However, if your business is profitable and can be proven through CRA documents, you can also provide your business tax documents as requested – more often than not, this is not required).
To be transparent, most major banks (or ‘A’ banks as we refer to them) will NOT offer a self employed mortgage without proof of tax documents (business financials, business T1s, etc.). B lenders on the other hand are great for this, and you will need to connect with a reputable Mortgage Broker like us to gain access to these lenders.
Are you business for self and seeking out a self employed mortgage? If you are, please connect with us and we’ll spend the necessary time to help you plan months ahead of your purchase or mortgage refinance. Call us today at (905) 455-5005.