However, this can make it harder to prove to lenders that you can afford to make your mortgage payments. I won’t brag about the benefits of using a mortgage broker ( especially if you are self-employed)., however I will reiterate the importance of being completely honest with your mortgage broker and provide all the details they are asking from you. Based on your situation, a mortgage broker or good mortgage professional can advise you of the type of information you need to present to improve your options and get the best possible rate. The Business for Self mortgage product is... unique in that the income stated by you cannot be confirmed using traditional methods (previous years Notice of Assessments). As such, the product guidelines require that the Lender assess the stated income for reasonability in relation to all other elements on the application (years in business and industry, credit profile, downpayment available, other investments,etc.).
Your mortgage broker needs to gain a better understanding of your business. Based on the type and nature of the business, is there an opportunity for you to generate additional income?
And to my real estate friends, and other commissioned based earners: Commissioned income is provable income. It is not reasonable that a commissioned borrower would bring in substantially more money than what is documented on their T4. Understanding the “whole picture” is the key to determining the reasonability of stated income and ensuring this program best suits your needs. Self employed borrowers may qualify under regular programs where lender and mortgage insurer allow a 15% gross up of declared income -this will save you a lot on the mortgage insurance premium itself, and allow you to buy with a much smaller down payment. It is important to look at both the provable income and stated income program options to ensure the best mortgage product and features. Okay now, take a breath! I do work with many lenders that are not federally regulated. Some of them have less strict guidelines when it comes to self-employed individuals. They use more common sense approach and they look at your whole financial picture rather than just what’s been reported on your tax return. This can give you more lender options and can potentially get you more money, with less troubles. Just give me a call at 647-893-2535 or send me an email at [email protected] Talk soon! Sign Up Here for Monthly Mortgage Updates Comments are closed.
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