Mortgages for the Self Employed – Part 1

This is the first of a series of articles to educate self employed people about their mortgage options and to show them how we at Mississauga-mortgage.com can help them.

Some general comments:

Most self employed people do not know what their mortgage options are and what they need to do to prepare themselves for a mortgage.  As a result they leave themselves vulnerable to less than best products from their bank or mortgage broker.  Thus, it is vitally important that self employed applicants are empowered in the mortgage process.

It might sound unbelievable, but in some cases it is actually easier to get a mortgage for a self employed applicant than it is for an employed person.  This is because salaried or hourly paid applicants are restricted to the exact income that they earn.  Self employed applicants have more options, because of the nature of self employment.

Preparing yourself for a mortgage:
Here are a few things that you need to do

1. Contact Jacques du Preez at mississauga-mortgage so that we can do a full mortgage analysis for you.  This includes a mortgage pre-qualification.
2. Register your business.  Don’t just operate on a HST number.
3. Make sure that your business is more than two years old.
4. Make sure that your credit is good.  Good credit is more important than income for mortgage qualification.
5. Make sure your business is visible.  Here are a few ways that you can do this:
   a) Website
   b) LinkedIn
   c) Online directories such as 411.ca
   d) Facebook
   If lenders cannot find your business on the web they question the legitimacy of your income.
6. For a property purchase: have 10% down payment for a purchase and an additional 1.5% closing costs.  This must come from the applicant’s own resources.  It cannot be borrowed.
7. For a refinance: have at least 15% equity in your property
8. Make sure that your income taxes are paid up to date.

If you have not done all of the above for your business we can still get you a mortgage at competitive rates, but if the above is completed we can get you the best mortgage with the best rates and conditions.  At Mississauga-mortgage we specialize in mortgages for self employed applicants.