Mortgage Loans Self-Employed

Business for self or self-employed income is becoming commonplace in Quebec. Yes, there are some risks involved, but the rewards are well worth it.

But when it comes to qualifying for a mortgage, it can be a bit more complicated! Since the bank views the self-employed client as a little riskier compared to a salaried person, they will be more stringent in their income verification process. One of the main reasons that a self-employed person can be refused is due to their tax returns. The bank wants to see a minimum of 2 years of Notice of Assessments. It will then average out the 2 last years and add + 15% to income. If you only have one year of working for yourself, you will not be able to qualify with traditional lenders, but there are other financing options available.

If you have 25% and up for a down payment, there are chances of obtaining mortgage financing and even alternative financing. Not all lenders are created equal. Some will accept verbalized income if they can see significant cash flow in your bank accounts for at least the last 6 months. If you have between 20% and 25% down payment, there might be alternative financing solutions available, but this is on a case-by-case basis.

Self-employed person refused for mortgage loan because of credit:

You can be refused a mortgage loan due to low credit rating or certain debts that are currently in collections. An in-depth analysis of your credit score will help determine the next steps in order to establish the right strategy for correcting defaults, such as:

• Debt collection
• Credit bureau errors
• Wrong amount registered on your credit report, etc.

Once these issues have been addressed, a certain amount of time will be required for your credit rating to go up and for you to requalify for a mortgage.

If it is an absolute must for you to move into your new home today and you have the appropriate amount of down payment and incomes, we can make it happen for you!