This will walk you through the process of obtaining a mortgage while self-employed. This includes information on document and downpayment requirements, minimum credit score, interest rate expectations and self-employment definitions.

1. SELF-­‐EMPLOYED
MORTGAGES
WHAT YOU NEED TO KNOW ABOUT
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

2. The purpose of this is to outline
how the mortgage approval
process works when you’re
applying as a self-employed
borrower.
By the end, you should be well
equipped to obtain a mortgage
approval while self-employed.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

3. If you are self-employed, gather
together ALL of your INCOME
documentation before your meeting
for a mortgage approval.
This will most likely be a minimum
of last 2 years of both personal and
corporate income tax documents. If
you don’t have these documents,
call ahead to discuss an alternative.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

4. If you haven’t been self-employed for 2
years, you’re in store for a detailed chat with
your independent Mortgage Broker or banker.
This type of employment comes with very
different income confirmation requirements
than for a borrower who is an employee for a
company, with no ownership in that company.
Mortgage qualification requirements are
dependent on your specific income/
employment structure, which leads to more
info required at time of application.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

5. You’re considered a self-
employed borrower if one or
more of the following apply to
you;
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

6. à You own your own business,
either incorporated or sole
proprietor or partner
à You are responsible for the
payment of your own personal
income taxes
à You work under contract with
your employer and they do not
deduct income taxes from your pay
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

7. One of the most important
components of a mortgage
application is the qualifying
income, or the borrower’s ability
to repay the loan.
If you’re self-employed, there are
2 types of qualifying income that
are acceptable.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

8. VERIFIABLE INCOME
Which means you qualify using
the income you report to the
government and pay taxes on;
confirmable by providing your
most recent 2 years tax filings.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

9. STATED INCOME
This allows you to state your
income at a reasonable level for
your occupation and time in the
industry without having to “prove
it on paper”.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

10. Being self-employed can allow a
person to write off expenses
related to the operation of their
business in order to lower their
personal income and as a result
pay less personal income tax.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

11. A “stated income” mortgage
product will cater to this type of
borrower, but because income is
not being confirmed by
acknowledgement from Revenue
Canada, the minimum qualifying
requirements for credit score and
down payment source and
amount are different.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

12. If you’re qualifying under a
“stated income” program,
you are required to have at
least a 10% downpayment.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

13. If you have less than a 20%
downpayment, your credit
score and history must be
very strong in order to be
eligible for approval under
“insured” self-employed
mortgage programs at best
rates.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

14. As far as downpayment is
concerned, the
requirements vary
depending on what type of
lender you’re going
through.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

15. If you’re applying for a stated
income insured mortgage product
with best rates, you must have at
least 10% of the purchase price
available from your own funds to
use for downpayment.
You can use a home equity line of
credit, but cannot use any unsecured
borrowings or gifted funds unless it’s
above the 10% from your own assets.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

16. When taking the alternative
lender route, there are more
flexible downpayment options
available, including seller
financing, gifted funds,
borrowed funds, or a
combination of all of them.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

17. Again, be aware when going
through an alternative lender
under a “stated income” program,
the rates are slightly higher than
best interest rates and there is
also the possibility of being
charged a lender fee.
Talk to your mortgage professional
about some preliminary cost quotes
with the alternative lenders so you will
know what to expect.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

18. When it comes to the other
paperwork you could be
asked to provide, required
documentation will vary
depending on your
employment status and lender
conditions.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

19. All lenders will request proof
that you are self-employed or
under contract.
As the documents requested will
be specific to your business,
discuss with your mortgage
professional what confirmation of
self-employment you can provide
that would be acceptable to a
lender.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

20. Some possibilities include:
- Articles of incorporation
- Business license
- T1 generals showing statement
of business related expenses
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

21. For the qualifying income
conditions, if you’re applying with
verifiable income, you will likely
be asked to provide at least 2
years Notice of Assessments and/
or full personal income tax returns
showing your average earnings.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

22. If you’re “stating” your income,
you could be asked for a self-
declared income letter or bank
statements showing income
deposits, among other
documentation.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

23. With regards to credit
requirements, the better your
credit is, the more appealing your
application is to a lender.
The minimum credit score to qualify for
the insured self-employed product is
700. If you’re score is less than that,
you still have options.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

24. A good credit score does not
exempt you from providing
documentation, though it does
help ensure you’re getting
maximum lender access and
competitive interest rates.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

25. Don’t limit your options, use a
mortgage professional that
has access to many lenders,
which translates to many
product offerings for you.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

26. If your mortgage has to be
insured, make sure you have
access to a lender that uses
all 3 mortgage insurance
companies.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

27. If you don’t require an insured
mortgage due to a larger
downpayment, it’s even more
important to use a mortgage
professional who has access
to multiple options, which
translates to a higher chance
of approval for you.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

28. Don’t be afraid to ask your
mortgage professional what kind
of lender access they have and
also if they have experience in
self-employed mortgages.
That experience could be the key
to structuring your application to
produce a favorable outcome.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

29. I can’t cover all the fine print of our
self-employed mortgage products, so
be prepared for in-depth questions
about your business, assets and
finances.
Full disclosure is ideal as it will help
your mortgage professional place you
with a lender whose requirements you
meet and whose terms are appealing
to you too.
SELF-­‐EMPLOYED
MORTGAGES
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA

30. Do you have
mortgage
questions?
LET’S
CHAT
SELF-­‐EMPLOYED
MORTGAGES
780-433-8412
INFO@MORTGAGEGIRL.CA
WWW.MORTGAGEGIR.CA
JACKIE
WOODWARD
MORTGAGE
BROKER
TMG