1 - 5 Year Terms
Choose between a shorter or longer term, based on your plans with your home.
Low Rates
Competitive interest rates from alternative lenders financing business owners.
Equity Line of Credit
Qualify for a home equity line of credit with your bank statements, not NOA's
All About Mortgages for Self Employed
Starting your own company can be an exciting and rewarding endeavour. If you are self-employed you may already have experienced the frustration of obtaining mortgage financing. Most lenders institutions require that self-employed individuals to provide their tax assessments to qualify for a mortgage. But this can result in your assessment showing that your net income is probably much lower than your gross income making it very difficult to qualify for a mortgage.
What is the self employed mortgage program?
Bank statement mortgage program
The self employed mortgage program, also known as the bank statement mortgage program, is a set of mortgage requirements designed by alternative lenders, for business owners. Under the self employed mortgage program, self employed home buyers and home owners can qualify using their business bank statements as income, rather than tax documents.
What Lending Products Are Available To Me?
The Low Documentation Mortgage
This type of mortgage is where you can purchase a new property or refinance your existing home up to 90% of its appraised value. The lender will base their approval status on your credit rating rather than your net income.
Steps to qualify for this Mortgage include:
- A clean credit history.
- No bankruptcies or foreclosures.
- late payments on credit cards or loans may lower your chances of qualifying
- Incorporation papers or GST number to valid your self-employment status for at least 3 years.
- Location of property
As always some restrictions apply. So let us help you qualify by speaking to a mortgage broker.
No Income Mortgage
- A No Income Mortgage allows you to purchase a new property or re-finance your existing home for up to 80% of its appraised value. Income and credit do not have to be perfect.
- With 20% down or at least 20% equity even with bad debt we can help you get that mortgage
- An established credit history helps you get a lower interest rate and a faster approval
- Let us get you to the path of homeownership. Speak to our trusted team of advisors today!
Self Employed Mortgage Programs and Rates Explained
There are quite a number of mortgage financing options available for self-employed homeowners and home buyers.
Self Employed Mortgage For Home Buyers
Business owners seeking mortgage financing under the self employed mortgage program must provide 3 to 6 months of their business bank statements as income confirmation. Generally, lenders will annualize (take the average of each month and multiply by 12 to determine the annual income) the last 3 to 6 months of deposits.
For purchasing a home, a minimum of 20% down payment is required under the self employed mortgage program.
For purchasing a home, a minimum of 20% down payment is required under the self employed mortgage program.
Self Employed Mortgage Refinance
Similar to the requirements for purchasing under the self employed mortgage program, under the self employed mortgage refinance program 3 to 6 months business bank statements will be required to annualize the business cashflow, to determine the annual income.
The maximum loan to value (LTV) for self employed refinancing is 80%.
The maximum loan to value (LTV) for self employed refinancing is 80%.
Self Employed Mortgage Rates
Self employed mortgage rates for both purchasing and refinancing start from alternative lenders start from 3.59%.
To determine the interest rate for a self employed mortgage, lenders factor various things such as credit score, and debt servicing ratios (gdsr and tdsr). The interest rate may increase if there are credit delinquencies, and if the GDS / TDS ratios are high.
For a home equity line of credit, the interest rate starts from prime + 1%, and the rate is determined on the same basis as above.
To determine the interest rate for a self employed mortgage, lenders factor various things such as credit score, and debt servicing ratios (gdsr and tdsr). The interest rate may increase if there are credit delinquencies, and if the GDS / TDS ratios are high.
For a home equity line of credit, the interest rate starts from prime + 1%, and the rate is determined on the same basis as above.
Home Equity Line of Credit (HELOC) For Self Employed
A home equity line of credit or HELOC for self employed borrowers are approved up to 80% loan-to-value (LTV). For a self employed home equity line of credit, the same qualifications and process as refinancing applies, as described above. The interest rate for a self employed home equity line of credit starts from prime + (1%). The interest rate is determined based on the borrower’s credit score and income qualification.
