If you’re self employed, you already know how hard it can be to get a Canadian mortgage for someone without a traditional job. Being self employed shouldn’t be punitive; you’re going to need to get creative about your financing if want to get a home or refinance your current home. When you work with a Toronto mortgage broker, you’ll be able to get the help that you need to get financing; when working with a bank’s loan officer you’re just another number. Here we’re going to go over everything you need to know about getting a mortgage for the self employed, so let’s get started!
Why is it So Hard to Get One?
Banks and every other type of lender make money off of the interest. It could be argued that they’re making profit appear out of thin air, but that’s just how things are. They have to know that you’re going to be able to be able to pay off your loan plus interest for the length of the loan… so mortgages for the self employed can be a tricky proposition for a lender. You’ll want to speak with a Toronto mortgage broker near you (or a mortgage broker where you live) so you know what kind of paperwork and documentation you’re going to have to provide.
Do You Qualify?
This will depend on your income (usually based per annum, or yearly income), your employment (this can be seasonal if you earn most of your income during the holiday season for example), and where you want to live. The criteria are pretty much the same, but there are some adjustments that make these unique to someone who is self employed. They may need you to have a cosigner, someone with a job and good credit, to get the loan. Working with a Toronto mortgage broker or a broker near you will help you better understand the conditions that may apply in your case.
Know What Kind of Borrower You Are Before You Shop
Before you start shopping for financing you need to understand the kind of borrower you are. If you’re self employed, you already know that part of the puzzle. Have you had bad credit in the past? Are you going to be able to prove that you have a host of liquid assets (money) at your disposal; will you be able to pay off the down payment right off the bat? If you have bad credit or not a lot of money, you may want to ask your Toronto mortgage broker if they know of any bad credit mortgages for the self employed that would be right for you. Explore your options before you commit to anything.
Talk with a mortgage broker before you sign anything; make sure that you have all of the proper documentation and paperwork filled out before you try and apply for one of these mortgages. You’ll save time and money, getting into a home faster!
About the Author: Mike Smith is a mortgage broker and avid blogger for Home Base Mortgages. HBM is a Toronto mortgage broker that provides home mortgages, mortgage refinancing, home equity loans, debt consolidation, private mortgages and second mortgages.