Self-employed borrowers face greater challenges at the bank when seeking financing. Self-employed mortgage options may be fewer and more difficult to qualify for. If you’re a business owner and a mortgage seeker, consider working with a mortgage broker before submitting your mortgage application.
During the summer of 2012, the Superintendent of Financial Institutions implemented a new regulation called Guideline B-20 which forced banks to scrutinize income before approving mortgage products.
The greater concern being that borrowers be held to stricter criteria to ensure they be able to afford to repay the mortgage loans issued to them. You may have heard this referred to as a “stress test”.
Applying for a mortgage under the new stress test rules as a self-employed entrepreneur has had a great impact on many business owners. Often the self-employed struggle to support the income declared on their mortgage application, despite having an excellent credit score.
Applying for a self-employed mortgage means working around the implications of tax shelters and creative accounting. Any discrepancy between personal tax returns and actual earnings can result in a declined bank mortgage application.
The strict lending criteria a bank must adhere to means that your bank may be unable to overlook any differences between reported income and actual earnings.
Despite your accountant’s explanation, your bank has to fit you into a specific box for approval and if your income doesn’t meet the requirements, your application cannot be approved.
The regulations your bank must follow also mean that most self-employed clients are restricted to very conservative mortgages. You may be forced to borrow as little as 65% of what your home is worth without paying mortgage insurance premiums.
An inability to prove your income to the bank’s satisfaction not only costs you more to borrow what you need, but it is far from a hassle-free process.
Working with a mortgage broker is less difficult and more cost-effective than dealing with a chartered bank. An experienced mortgage broker is one of the best paths to a hassle-free self-employed mortgage.
Sure, it can be more challenging to qualify for a self-employed mortgage – but it doesn’t have to be. The Mortgage Brokers Network secret is access to lenders who are able to overlook things your bank cannot.
In fact, there is an entire network of lenders who provide better rates with more flexible qualifying terms; you just need to know where to look.
An experienced mortgage broker can help you navigate the alternative lending solutions at your disposal. As an entrepreneur, there are more mortgage services available to you than the traditional fixed or variable rate mortgage at your financial institution.
A qualified mortgage broker can help you navigate the world of self-employed mortgages. We know lenders who will accept stated income documentation. We have access to lenders who will allow you to declare what you earn rather than demonstrate it. We also know lenders who will accept add backs, allowing you to add back some of your business expenses such as vehicle and capital cost allowances.
You don’t have to navigate the world of self-employed mortgages alone if you are a sole-proprietor or own a corporation. With more than 30 years of experience and access to over 50 lenders you can count on us to get your self-employed mortgage approved.
Working with a broker who knows which lender to approach can have many financing benefits. We take the time to understand your tenure, documentation and the nature of your business activity. Working with a broker can save a lot of time and ensure you get the product that best suits your needs.
Even if you’ve applied with other lenders and been declined for a self-employed mortgage, we can help. Our specialty is assisting borrowers who have faced challenges due to income or credit history. We have an advantage over other lenders because our many lending partners are willing to work with unique and challenging situations that a bank may not.
We provide mortgage services to Canadians and our clients come first. With access to over 50 lenders we compete to make sure you get the best rate coupled with the most flexible terms.
Our many years of experience working with self-employed clients means that we know exactly who to approach on your behalf to suit your specific lending needs. The strength of our network is your advantage as a borrower.
Our common-sense approach to lending will help you obtain a mortgage. If you’re looking for a self-employed mortgage or are interested in learning more about your options, it’s time to call the brokerage that has been serving Canadians for over 30 years.
We recommend booking a free consultation with our team to review your options. Our lenders offer flexible lending requirements that can work with your unique business income and accounting. Contact us today or apply online and find out why Canadians choose the Mortgage Brokers Network.
|Term||Posted Rate||Our Rate||Claim This Rate|
|Home Equity Line of Credit||Prime +1%||Prime +.50%||Claim Rate|
|Fixed 1 Year||4.50%||3.09%||Claim Rate|
|Fixed 2 Year||4.65%||3.39%||Claim Rate|
|Fixed 3 Year||4.65%||3.79%||Claim Rate|
|Fixed 4 Year||4.65%||3.99%||Claim Rate|
|Fixed 5 Year||4.89%||4.14%||Claim Rate|
|Variable 5 Year||5.80%||3.2% (prime -.95%) Net Rate 2.25%||Claim Rate|
|Fixed 10 Year||5.90%||4.54%||Claim Rate|