Self-Employed individuals generally include realtors, contractors, business owners, financial planners, network marketers, stock brokers, and all 100% commissioned jobs…etc. These individuals do NOT have T4s. Instead, they have T1 General that shows business income (loss).
If a Business-For-Self (BFS) individual has reported sufficient taxable income on Notice of Assessment (NOA), with 2 year working history, lenders are willing to take them as regular applicant where no insurance premium is applied.
If a BFS individual has NOT claimed sufficient taxable income, in other words, his/her NOA does not show enough income on line 150 to debt service the loan, an insurance premium will be applied on the mortgage amount.
The general guidelines for self-employed (BFS) are:
1. You have reported business income for minimum 2 years (or in the same industry)
2. You can provide 1 of the following items: business license, GST/HST return summary, incorporation certificate, audited financial statements prepared by CA, or commission stubs
3. Your down payment must be from your own resources, shown on 3 months record of bank statements, investment portfolio, RRSP, and other liquid assets.
4. Your credit score is vital for qualification, the higher your score, the more you can borrow up to 95% LTV for owner occupied property
Read “Qualifying 3. Source(s) of Income“
Contact us if you do not meet all of above criteria. You will be able to qualify under other mortgage programs only available through broker channel thru Best Rate Best Mortgage.
Filed under: Am I Qualified?, Approval Process, Self-Employed Mortgage (BFS)
[...] Self Employed Purchase Insurance Premium Posted on May 25, 2008 by 1dayapproval The following guidelines are written assuming you are a business owner and do not have sufficient reported income on T1 (read here for BFS general guidelines) [...]
millennialism says : I absolutely agree with this !