Business For Self Mortgage
As the number of self employed Canadians grows, so do their options for obtaining a self employed mortgage. Traditionally, to obtain a no income verification mortgage, a virtually impossible down payment of 35% is required. Now there are other options with much more reasonable rates. Many times, business for self mortgages will require that you have at least two years of self employment tenure, but that is not always the case. Depending on how long you were employed and what kind of work you did before you became self employed, you may still qualify. Also, other options like an Alt-A mortgage, low doc mortgage, and stated income mortgage are all options for the self employed. If these options sound more manageable to you as a self employed Canadian looking for viable mortgage options, read on.
The only way to avoid a huge down payment requirement is to become a borrower with CMHC self employed simplified. There is no need to fear high interest rates when using this option because rates are very competitive with the current market. Also, when you work through CMHC self employed simplified, you can obtain a mortgage with as little as 5% down. If you are looking for a business for self mortgage, CMHC self employed simplified could certainly be an option for you!
Another program for self employment mortgage options is Alt-A mortgage. There are certain things you must meet to qualify for this business for self mortgage. The two-years-in-business minimum is required here with a proof of income that is at a reasonable level of the industry you work in and the length of time you have been operating. Strong credit and no reports of bankruptcy are requirements here as well. If your income is based on commissions, since it can be so irregular and unpredictable, you are ineligible for this program. There are many other options other than an Alt-A mortgage, so if the restrictions exclude you, there are still ways you can obtain a self employed mortgage.
If you have a long history of maintaining great credit, you can skip a few steps in the mortgage process and get something called a low doc mortgage. As you can derive from the name, this kind of mortgage allows you to get a loan based on your great credit history without the requirement of showing all the traditional documentation. This is a perfect solution for self employed individuals. It is a form of no income verification mortgage because there is no need to show T4s or pay stubs.
A stated income mortgage is a form of a low doc mortgage that requires lenders to have great credit and a reasonable income to debt ratio. This kind of loan has only recently been made available again. At the start of the economic crisis, many lenders discontinued approving stated income mortgage loans because the lack of documentation makes it a risky move for lenders. Under normal economic circumstances, it is manageable. During the lending crisis however, the only lenders who continued to hand out stated income mortgages lost a lot of money as thousands of people defaulted on their mortgages. Fortunately for the self employed, these are being offered again.
Anyone looking for a self employed mortgage will be satisfied with the option of no income verification mortgage loans. If you are a personal contractor, work with commissions, or get a high percentage of your income from tips, it can be difficult to prove your income. The best business for self mortgage options will not require income verification. Still, this option may only be possible if you have perfect credit, no history of bankruptcy, and proof of two years you been self employed by either business license, two years T1 General, or Articles of Incorporation.
It is clear that there are multiple options for you as a self employed resident of Canada to obtain a self employed mortgage. Hopefully, since you are a responsible entrepreneur with a drive to succeed, you have a clean credit score. It will help you be approved and receive the lowest interest rates possible. If not, you may be required to put more money in your down payment or pay a higher interest rate. Even if this is the case, your dreams of becoming a homeowner can become a reality with many options to receive a business for self mortgage.