If you’re looking for a trusted, experienced, and knowledgeable Regina mortgage broker to help a first-time home buyer, I am here to help. No matter what stage you are in the mortgage process, I can assist you in securing financing to get the home of your dreams. I also understand that all those mortgage rules and regulations surrounding the process can be confusing. My team and I are here to answer all your mortgage questions and take you to home ownership. The subject of my latest tip is whether you can get a mortgage if you’re self employed.
Can You Get a Mortgage If You’re Self-Employed? Here’s What You Need to Know
As an award-winning mortgage broker with TMG The Mortgage Group in Regina, Saskatchewan, I often hear this question: “Can I get a mortgage if I’m self-employed?” The answer is yes! However, the process can be more complex compared to traditional salaried employees. If you’re self-employed and looking to buy a home, here’s what you need to know to improve your chances of mortgage approval.
1. Lenders View Self-Employed Borrowers Differently
When you’re self-employed, lenders see you as a higher risk because your income isn’t as predictable as a salaried employee. Instead of pay stubs and employment letters, you’ll need to prove your income through tax documents, financial statements, and other paperwork. While this can make the approval process more work, it’s entirely possible to secure a mortgage with the right preparation.
2. Income Documentation is Key
To qualify for a mortgage, lenders typically require:
- Two years of personal income tax returns (T1 Generals)
- Notices of Assessment (NOAs) from the Canada Revenue Agency (CRA)
- Statement of Account – Personal – to confirm taxes are paid in full (CRA)
- Financial statements if you operate an incorporated business
- A good credit score and a history of responsible credit use
If you report a lower taxable income due to deductions, some lenders may use your gross income or add back certain deductions to determine your qualifying income.
3. Consider Stated Income or Alternative Lending Options
If your reported income is too low to qualify with traditional lenders, you may need to explore alternative options:
- Stated Income Programs: Some lenders offer mortgages based on reasonable income expectations for your industry, rather than just your tax returns.
- B Lenders and Private Lenders: If major banks decline your application, alternative lenders may be more flexible but often come with higher interest rates.
4. Improve Your Mortgage Eligibility
To increase your chances of mortgage approval, consider these tips:
- Keep Personal and Business Finances Separate: This makes it easier for lenders to assess your financial health.
- Reduce Debt: A lower debt-to-income ratio improves your application.
- Save for a Larger Down Payment: A 20% down payment can help you avoid CMHC mortgage insurance and make lenders more comfortable with your application.
- Improve Your Credit Score: Pay bills on time and keep credit balances low.
5. Work with an Experienced Mortgage Broker
Navigating the mortgage process as a self-employed individual can be complex. As a mortgage broker, I have access to a variety of lenders, including those who specialize in self-employed borrowers. I can help you find the best mortgage options tailored to your unique financial situation.
Final Thoughts
Yes, self-employed Canadians can absolutely qualify for a mortgage—it just requires some extra preparation. By organizing your financial documents, improving your creditworthiness, and working with an experienced mortgage broker, you can secure the right mortgage for your needs.
If you’re self-employed and need mortgage advice, I’d be happy to help. Reach out to me, Ryan Boughen, for expert guidance and access to the best lending options available in Regina and across Saskatchewan!
PLEASE NOTE:
Mortgage rules and lender policies change all the time. Because Ryan has access to many lenders and have specialized expertise in structuring mortgage applications, he can determine the optimal way to structure your application to maximize the utilization of things like employment income, self employment income, Canada Child Benefit income, disability income, maternity leave, down payment sources, credit issues, debt ratios , etc. Choice in lenders, combined with his experience, can make the difference in qualifying and/or qualifying for the amount you want. It’s not just about the best rate, it’s about flexibility and choices.
Ready to take the first step?
Contact me today, and let’s discuss how we can make your first home a reality!
