Mortgages for Self Employed {No Proof Of Income}

Self employed want to buy a house. can't prove all income but need a mortgage loan, client says

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Banks and "A" Lenders pay us for your residential service. EXCEPT bad credit mortgages, some self employed mortgages from "B Lenders", private mortgages or multi-use and commercial loans - broker fees are payable by clients. Lenders change their products and interest rates without notice.

..... follow me to get mortgage updates ... Marie Copeland @AxcessMortgage


Ask us about self employed loans no proof of income to buy a home.jpgSelf employed want to buy a house? Call us for mortgage help.

Mortgages for self employed - What does that mean? How to get a mortgage with no proof of income if you're a small business owner?

We know that as small business owners you have the ability to reduce reported income by expensing items related to your business operations. But, by reducing the income to save on taxes you reduce the amount of reported income needed to qualify for mortgage.

Mortgages for self employed are for you if your business has a cash component or you write off lots of business expenses to reduce your taxable income.

Recently there have been more changes that effect self employed loans no proof of income. 

Fortunately there are custom fit home buyer loans for those unique circumstances of small business owners.

As mortgage brokers, we are paid for our service by banks and "A" lenders including their mortgages for the self employed on the "A" side of lending. This is not always the case with alternative "B" mortgage lenders and we pass our fees unto clients.

Let's take a close look at what's now available for small business owners who cannot prove all income on CRA tax returns.

Understanding self employed loans 

Do you qualify for "A" interest rate mortgage for self employed in business OVER 2 years ?

Can't prove all income but I need a mortgage loan, a reader says.

To fit insured lending you have to be in business two full years, your business is registered as self employed proprietorship, not incorporated, you have a business bank account, good credit and declare income on your tax returns.

You've filed your personal taxes for both years and have your tax returns and CRA Notice of assessment we can work with. You do not owe taxes to CRA and have proof of payment on any due balances.

Two years averaged CRA personal Notice of Assessment income will be used as a starting point. If you're a little short to qualify, we look at your tax returns to find qualifying expenses to add back and raise your income.

Let's take a look at a small shortfall self employed registered proprietor income verified mortgage (not applicable to corporations):

  • $51,000 Year 1 - Line 150 on your CCRA Notice of Assessment 
  • $63,000 Year 2 - Line 150 on your CCRA Notice of Assessment
  • $114,000 two year total / 2 years = $57,000 your two year average

Let's say we can find taxable items that we can add back that add up to $8,550 -- This gives us $65,550 in total income.

We have lenders that will allow the above formula to qualify for mortgages for self employed. 

If your two year average is not enough to qualify, then we'll move you to alternative mortgage financing option below, at a bit higher interest rates and 15% - 20% down to buy or up to 80% of home value to refinance.

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How to get loans for self employed with no proof of income

Depending on the quality of your application and property, credit, area and size of municipality, alternative mortgage financing is available at 15-20% down to buy an owner occupied home. 35% down for rural properties on well and septic systems.

This mortgage is for you even if you're still in the first year of starting your business - close to12 months. You'll need proof of self employment, either business registration or Articles of Incorporation. Plus, few months of business bank account history along with several invoices to be used to support your income needed to qualify.

Good or low credit, we have lenders that understand your situation and offer mortgages for self employed to buy a home or a rental property -- or, to refinance home equity mortgage.

In these situations, the quality of your credit will determine your interest rate and how much money the lender will give you.

The lenders for business owner no income mortgage focus on the quality of the property, location and marketability.

Each situation is unique but let's take a look at the loans for self employed with no proof of income that the broker channel lenders have to offer.

In Ontario "No proof of income" alternative mortgage lenders do not soley rely on traditional proof of income such as tax returns. They will require your business registration, bank statements showing deposits to justify the amount of stated income needed to qualify for a mortgage plus invoices and other requirements depending on your circumstances.

Here is an example how these self employed home loans might work:

  • Let's say that you need $100,000 of self employment income to qualify for your mortgage;
  • Lenders may ask you for 6-12 months bank statements showing enough deposits along with customer invoices or accountants' letter.

The interest rates on mortgages for self employed no proof of income are a bit higher than bank rates, there also maybe lender fees and you will need a minimum 15% - 20% down payment o.a.c. to buy a house, depending on the area and your credit. The down payment can be either your own money or gifted.

The alternate mortgage financing residential lenders will also allow a second private mortgage up to 90% of purchase price - the remaining 10% down payment and closing costs have to come from your savings.

In a nutshell, alternate lenders may give you a mortgage for 65% - 85% of purchase price depending on your situation and the strength of your application and property.

If needed, 2nd mortgages Ontario can be used to top up the first mortgage. With an interest only 2nd mortgage you can keep your payments low and give yourself some breathing room. 

NEW! You have strong credit history and 50% down payment to buy a home

The broker channel lenders have come up with a conventional home buyer loan for self employed proprietors and contract individuals with strong net worth and strong business history. This home buyer loan is for you if you can't prove income on your tax returns but have 50% down payment of your own money. The lender will be looking for a strong business history of responsibility and credit management. Qualification is based on reasonable for the industry income as STATED BY YOU, the borrower.

This is a unique mortgage product offered by select lenders at their pricing and discretion -- both fixed and variable rates available. 

What if you don't qualify for none of the above?

If you have debt problems or are discharged from bankruptcy or consumer proposal - we have bad credit mortgages Hamilton and throughout Ontario. This is where bad credit home equity loans and private mortgage lenders step up to the plate.

You may be able to buy a house with private mortgage lenders help - getting a first or second private mortgage or both. Private lenders fill a huge void in the mortgage market. This source of funds is more expensive but you get your money fast.

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* NB - It is important to note that lenders regularly change products and qualifying requirements for approvals are at their discretion. Lenders reserve the right to discontinue or change any self employed mortgage products at any time without notice to brokers.

Marie Copeland FSU, Hamilton Mortgages and throughout Ontario from Toronto to Niagara areas.

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Article of Incorporation process to register a business is affordable and easy. Online Incorporation will save your hundreds of dollars in legal fees if you do it yourself.

Private mortgage lenders understand the problems of the self employed.

Second mortgages are a good short term strategy for self employed borrowers.

Self employed want to buy a house ?

Or, refinance home equity mortgage?

Call 905.308.8063, or

Share with your self employed friends who want to buy a home

Thank you reading about mortgages for self employed no proof of income. Stop by our website often and share our home buyer loans with your family and friends.

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