STATED INCOME PROGRAM FOR SELF-EMPLOYED BORROWERS

Many self employed people wonder how much income is required to qualify for a mortgage. 

Whether you are a new business owner or have been a self-employed borrower for many years, I would like to introduce the stated income program which  you can now access to obtain mortgage financing. 

Here’s what you need to know…

Usually, if a borrower with good credit approaches a big bank, the bank representative will ask for their T1 Generals and Notice of Assessments for the last two years and proceed to use a two-year average of their claimed income (the income they paid taxes on) to calculate income required to qualify. Unfortunately, because many borrowers write off expenses involved in running their business, their claimed income is usually not enough to qualify for the real estate of their dreams.

Thankfully, if self-employed borrowers choose to work with a very reputable mortgage broker, they can apply under both the stated income program and the “Expanded BFS (Business For Self Program)” also insured by Genworth and Canada Mortgage and Housing Corporation (mortgage default insurers). They will have to pay a type of default insurance but will still be offered extremely competitive interest rates. 

For proof of income, borrowers will have to provide their reasonable income amount on an income declaration which would be based on their professional designation and skillset. They will also have to demonstrate credit worthiness by having a solid credit history and credit score. 

What you will need for this program: 

1. Your recent tax return to show Gross Income only.
2. Most-likely 12 months of bank statement to show your income being deposited into your account. 
3. Business License, HST # or some other form of proof of self-employment.

Please note this program is only eligible on owner-occupied homes meaning this must be your principal place of residence. 

For all of your mortgage questions, please email me sarah.colucci@mortgageedge.ca or call 647-773-4849.

www.coluccimortgages.com 

Sarah A. Colucci
Senior Mortgage Agent
Mortgage Edge, Broker 10680

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