Stated Income Mortgage
“Stated Income Mortgage Landscape
Has Changed”
It wasn’t that long ago that a stated income mortgage was not that difficult to locate and secure, and for very good rates.
And while there still remains an ample supply for the “Business For Self” of self employed mortgages, the qualifying has become more difficult and the cost, in many cases, higher.
If we go back a few years, the self employed mortgage industry was tagged as major growth market by the primary mortgage lenders with virtually every lender coming out with their own set of programs both for verified income and stated income situations.
And for a period of time, it was almost too easy to gain access to a considerable amount of capital for mortgage financing, at excellent rates, without a whole lot of proof as to whether or not you were in a good position to pay it back.
But with the collapse of the sub prime market in the U.S. as well as Global financial problems have caused the Canadian regulators to to intervene on many mortgage rules and criteria, including stated income mortgages.
The result has seen many lenders completely abandon stated income programs and others putting more meat and qualifying requirements into the process.
This may be viewed as a case where the pendulum swung too far in favor of too easy an access to lower rate mortgages and that now we are in an environment where the market is providing mortgage services that more properly align with the related risk of a given transaction.
While this can come as a cost to many of the self employed, the changes made to date have also provided longer term stability to the overall market place and are in keeping with other mortgage changes that have been implemented to reduce overall market risk.
The good news is that supply of BFG mortgages remains solid. The bad news if you want to call it that is a larger percentage of these loans are being done in the secondary banking market where the cost of financing is going to be slightly higher.
Self employed individuals can still qualify for the lower available rates. It just won’t be as easy to qualify which has certainly put us into a period of adjustment.
What can also be confusing for business owners is figuring out which of the available stated income mortgages are best suited for them as there is quite a broad range of program offerings out there.
This is a good example of where an experienced mortgage professional can potentially add considerable value to your search for the right mortgage.
Working through all the different self employed mortgage programs is a much easier process to navigate with some expert assistance to make sure you’re not only getting the best deal available, but also that you’re setting up your mortgage financing to fit your projected cash flow now and in the future.
If you need assistance with stated income mortgage financing, I suggest that you give me a call so we can go over your requirements together and discuss the different options that are available to you.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel