Can I Still Get a Mortgage if I’m Self-Employed?

Yes, you can absolutely get a mortgage if you’re self-employed! While the process may involve additional steps and documentation compared to salaried employees, lenders offer many options for self-employed individuals. As an experienced Mortgage Broker, I’ve helped many self-employed clients in Hamilton, Ancaster, and across Ontario secure mortgages that work for their unique situations.

What Makes Getting a Mortgage Different for the Self-Employed?

Lenders typically consider self-employed individuals as higher risk because their income may fluctuate. To address this, they often require more documentation to verify income and financial stability. However, there are plenty of options to help you get approved.

What Documents Do You Need?

1. Proof of Income
   • Tax Returns (2 Years): Most lenders require your last two years of Notices of Assessment (NOAs) and T1 Generals from the Canada Revenue Agency (CRA).
   • Business Financial Statements: If you own a corporation, you may need to provide business income and expense statements.
2. Bank Statements
   • Lenders may ask for 6–12 months of bank statements to show consistent deposits and cash flow.
3. Proof of Business
   • Documents to show that you’re actively running a business, such as:
     • Business license.
     • GST/HST registration.
     • Articles of incorporation (if applicable).
4. Credit History
   • A strong credit score (typically 650+) improves your chances of approval and access to better rates.
5. Down Payment
   • You’ll need a minimum down payment of 5%–20%, depending on the property price and your situation.

Mortgage Options for the Self-Employed

1. Traditional Mortgages
   • If your income is easily verifiable through tax returns and NOAs, you may qualify for a standard mortgage with competitive rates.
2. Stated Income Mortgages
   • For those with non-traditional or fluctuating income, some lenders offer stated income programs. These programs allow you to declare your income based on your business’s revenue, backed by other documentation (e.g., bank statements or letters from your accountant).
3. Alt-A or B Lenders
   • If your income verification doesn’t meet the strict criteria of major banks, alternative lenders specialize in working with self-employed borrowers. While rates may be slightly higher, these lenders are often more flexible.
4. Private Mortgages
   • For unique or complex situations, private lenders can provide short-term solutions, though these come with higher rates and fees.

How I Help Self-Employed Clients

As a mortgage broker, I understand the challenges self-employed individuals face and work closely with you to simplify the process:

1. Tailored Solutions
   • I’ll assess your financial situation and match you with lenders that specialize in self-employed mortgages.
2. Documentation Guidance
   • I’ll help you gather the right documents and present your case to lenders effectively.
3. Access to Lenders
   • With access to both traditional and alternative lenders, I’ll find the best mortgage product and rate for your unique needs.
4. Ongoing Support
   • Whether you’re buying your first home, refinancing, or renewing, I’m here to guide you every step of the way.

Tips for Getting Approved

1. Improve Your Credit Score
   • Pay bills on time and reduce your debts to boost your score.
2. Save a Larger Down Payment
   • A down payment of 20% or more can make approval easier and eliminate the need for mortgage default insurance.
3. Organize Your Finances
   • Keep business and personal finances separate, and maintain clear, accurate records.
4. Work with a Mortgage Broker
   • A broker like me can simplify the process and connect you with lenders who understand self-employment.

Key Takeaway

Getting a mortgage while self-employed may require more effort, but it’s entirely possible with the right preparation and guidance. If you’re self-employed and looking to buy or refinance a home, let’s connect. With my experience and network of lenders, I’ll help you navigate the process and find the best solution for your unique situation.

Call me at: 905-929-1199
Email me at: lamalfi@tmacc.com