Self employed mortgage requirements can vary from mortgage lender to mortgage lender, but here are some general guidelines to follow if you’re seeking or considering this type of mortgage financing.
- The property in question needs to be owner occupied with purchase financing available to a maximum of 75% of the purchase price or appraisal value, whichever is lower.
- Most institutional programs for self employed mortgages are for a home purchase only and cannot be utilized for refinancing purposes.
- The typical maximum amortization period you can expect to secure is no greater than 35 years.
- While the minimum beacon score can vary among mortgage lenders and their related programs, for self employed mortgages, the applicant score needs to be 720 are higher if declared income cannot be verified by acceptable third party documentation.
- The credit profile of the borrower(s) cannot have any previous bankruptcies on file and it also must show a minimum of three years of credit activity with at least three different sources of credit.
- Applicants must provide copies of their most recent notice of assessment from the Canada Revenue Agency to show that there are no income taxes owing.
- Stated income must be determined to be reasonable and comply with the debt servicing requirements of the mortgage program.
- The applicants must provide at least two sources of third party documentation to show at least three years of continuous self employment.
- The down payment of at least 25% needs to be verified before any funds can be advanced and no secondary forms of financing are allowed on the property.
Once again, these are not absolute guidelines by any means, but do provide the basic requirements one can expect from institutional lenders that consider self employed mortgage applications.
If you cannot meet the qualifications listed, there may still be mortgage programs that you can apply for, but they are likely going to be for higher rates.
If you are seeking a self employed mortgage program or just looking for more information, I suggest you give me a call so that we can go through your situation in detail and answer any questions you may have.
Click Here To Speak With Self Employed Mortgage Broker Joe Walsh