Mortgages for the Self-Employed

Let’s face it, the self-employed get a bad reputation for being hard to deal with when it comes to mortgages. The truth is that the process can be relatively simple if you’re prepared!

So why do people have this preconceived idea that self-employed people make the mortgage process difficult? Here are a few reasons:

• Income can be hard to track. Entrepreneurs often work the system to legally save money on taxes by having complex tax strategies. Though these strategies are highly beneficial to a family’s income, it can be a nightmare for a mortgage professional.
• Receipts come in a shoebox. When working for yourself the last thing you want to do is paperwork. This is why so many accountants are brought a shoebox or bag full of receipts at tax season that they have to work through.
• Entrepreneurships can be complex. The self-employed are often very closely tied to their business operations. This means that on a mortgage application the information relates to the person and their business.

The biggest thing to prepare for a self-employed person obtaining a mortgage is the amount of paperwork you’ll have to fill out. To make the whole process easier here is a list of the documents you must bring to the first meeting with your mortgage professional:

• Personal identification
• Proof that you are the principal owner in the business
• Financial statements from your business and business credit score
• Personal credit scores
• A copy of you GST licence and/or copy of licence of incorporation
• Notices of Assessment from the past 2-3 years showing taxes have been paid in full
• Down-payment of at least 10% and proof that it was not a gift
• Proof of contracts extending into the future to demonstrate longevity of income.

Though this may seem like a lot of documentation always be prepared for your mortgage professional to ask for more. Self-employed people are all different and may require other documentation to show your stability to prove yourself a good risk for a lender.

If you have any questions or you would like more information on obtaining a mortgage as a self-employed person contact your mortgage professional or AC Lending Group today!