Qualifying for a Mortgage as a Self-Employed Individual: How Long is the Required Business Experience?

In Canada, there are three types of mortgage lenders for self-employed borrowers: A, B, and C. A lenders include major banks, credit unions, and mono-line lenders, offering the best interest rates and competitive mortgage terms. B lenders are alternative mortgage lenders that offer competitive financing rates and terms but with higher interest rates and lending fees. C lenders are private lenders that do not adhere to specific lending guidelines and only consider available equity or downpayment as their approval criteria. Borrowers may approach B or C lenders if they have limited credit, are self-employed for less than two years, or have little to no claimed income on personal taxes.

Obtaining a Mortgage from Alternative Lenders as a Self-Employed Individual.

Alternative lenders offer more flexible mortgage options that do not require a minimum of two years of business experience or standard income requirements. Instead, they consider other forms of income such as bank statements, invoices, and contracts to help borrowers qualify. For real estate purchases, a minimum of 20% down payment is required to qualify with an alternative lender. For refinancing, at least 20% equity in the property is required.

Qualifying For A Mortgage With a Private Lender If You’re Self-Employed ​

Private lenders do not require verification of income or credit, but they will request a copy of your credit report and mortgage application. Instead, they will depend on the size of your down payment or the equity you have available if you are refinancing.

Here's what mortgage lenders require with a self-employed mortgage application: 

Most banks require self-employed borrowers to have excellent credit history, income tax documents for the last two years, sufficient income claimed on Line 150 of their Notice of Assessments, and to have been in business for at least 24 months to qualify for the best interest rate and mortgage loan amount.

Here's how we can help if you don't have at least two years' worth of business income...

​Even if you don't have two years' worth of business income, Sarah can still help you secure competitive mortgage financing. With access to many different lenders who cater to those with less than the standard requirements for self-employed mortgage loans, she can help you find the perfect financing solution.

Business For Self Stated Income Program.

Stated income programs are available through Canada Mortgage and Housing Corp. and Canada Guaranty, where income is based on reasonability rather than what is claimed on income taxes. Only a Notice of Assessment for the past year is required to show no outstanding income taxes owed to the Canada Revenue Agency. These programs are available for purchases with as little as a 10% down payment, but commissioned salespeople do not qualify. If stated income programs are not possible, alternative loans with other means of verification such as bank statements, contracts, and invoices are available with competitive interest rates. For refinancing, home equity loans with minimal income verification can be obtained.

Ready to secure mortgage financing even if you don't have the standard two years of business income? Our stated income programs and alternative loans offer flexible solutions with competitive interest rates. Whether you're purchasing with a 10% down payment or refinancing with minimal income verification, we can help you find the perfect financing option. Contact us today to learn more about how we can help you achieve your homeownership goals! your mortgage application today. Call me directly at 647-773-4849 or Apply Online.