The Difficulty of Getting a Mortgage When You Are Self Employed

The Difficulty of Getting a Mortgage When You Are Self Employed 1024 440 Guardian Financing

More and more Canadians are getting into self-employment or working on a contractual basis.  Recent statistics indicate that almost 23% of all income earners in the country are self-employed or survive on part time jobs. Unfortunately, it is not always easy for them to be approved for a private mortgage loan.

Most self-employed individuals pride themselves in the fact that when working for one self, it becomes possible to write-off a lot of personal expenses, and this will lead to them paying slightly lower taxes. However, there is a downside that comes with this. It is not always easy to prove income and after all deductions and taxes, what is normally indicated in the tax return is usually a smaller income. Consequently, qualifying for mortgages becomes really difficult and if they manage, they can only secure lower amounts.

Self-employed mortgages are now available to this demographic and they are increasingly becoming popular in Canada. These mortgages that are specifically designed.  With the help of mortgage agents, self-employed people now have access to a myriad of lenders and can negotiate flexible and agreeable terms that will make it possible for this group to access funding for buying homes. In most cases, the basic requirements to apply for this kind of loan include a six month bank statement, business license or article of incorporation and invoices or contracts.

But as self-employed individuals consider getting mortgages with these new mortgage products, it is important for them to keep in mind the new mortgage rules that became effective in January 2018. The rules are applicable to all mortgage applicants, and for the self-employed, some of the changes may be crippling and may make it very difficult for them to access lending facilities to buy a home.