Purchasing a home is a dream that everyone envisions whether they work for a company or are self employed. There are various options available specifically for those who are self-employed. Triple M Mortgages is definitely the place that can guide you on this particular type of loan and advise you further on the loan process. Let us take a look at what the requirements are for a Self-employed mortgage and how qualification can be determined.
This particular mortgage was designed for self-employed individuals who wish to purchase a property. The mortgage can be a residential mortgage on a family home, or it can be a loan on a commercial property that is owned by a business owner or who is self-employed.
Regular mortgage qualification of net income does not conceptually work for the self-employed, because they have a different way of claiming their earnings than those who are salaried workers.
What is required for a Self-Employment Mortgage?
Similar to most mortgages, there are certain documents required and certain requirements to move forward with the mortgage process.
• Statements outlining expenses, debt, income, and any business finances. Bring account and banking statements if you are incorporated. By showing a source of additional revenue, you could qualify for higher mortgages and lower rates.
• Check your Notice of Assessment to see if any taxes are owing, and provide proof your taxes are paid up to date.
• Bring proof of the last three years of income while being self-employed, as you may get some tax deductions. Lenders often want to see income tax returns and similar documents from the last two to three years.
• Some lenders will require you to have a credit check. This is not a bad thing as lenders who do this often offer fixed rates or lower rates. If you have good credit, your lender should be able to get you a self-employed mortgage. If your credit is less than good, you may need the help of a private lender.
• A mortgage lender will ask if you have any contracts showing future work or income, to see what your expected future income will be. Bring any sales contracts or work orders you and your customer have signed.
• Have your personal banking statements handy, and make sure they show any additional money going into your bank account. Showing this information can help you qualify for higher and better mortgage loan amounts. Your mortgage lender can figure out how much your true income is and determine how much of a loan you can get, what interest rates you can be offered, and which mortgages you can qualify for.
• You will need to have your business license and any articles of incorporation. Make sure you are listed as an owner of the articles of incorporation. Your mortgage lender will review these documents.
When you are self-employed, it may seem challenging to get a mortgage since you have to prove you have a steady income. With Triple M Mortgages, we can show you getting a mortgage while being self-employed is indeed possible.