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.

We in Mississauga & Canada are in a very unique & fortunate situation with mortgage rates that have reduced by more than 2% in 6 months!  This presents amazing opportunities for those who have mortgages on their homes.  There are some poor reasons to refinance your mortgage before its maturity date, but here are five very good reasons:

1. Risk mitigation – It is no secret that our economy is currently struggling and that it will take a while for it corrects itself.  None of us knows where the economy will be in three years time, thus if you are renewing your mortgage term in three years or less you might want to mitigate that uncertainty risk by refinancing your mortgage now while you current circumstances are favorable. If you refinance into a new 5 year term now, your maturity date would only be in 2014!
2. Mortgage rate improvement – If you secured a mortgage rate two years ago your mortgage rate is likely almost two percent above the current fixed rates.  Lower mortgage rates mean that less of your payment goes to interest and more goes to principal!
3. Cash flow improvements – Because of the lower mortgage rates you will save money on a monthly basis.  You can choose to use this money in any way that you want and it is tax free.  Your cash flow savings could pay for a car over the next five years!
4. Time (amortization) savings – If you refinance your mortgage and keep your mortgage payment the same (instead of using the monthly savings for something else), you can probably pay your mortgage off faster by three years, depending on mortgage amount etc.
5. Debt consolidation – If there was ever a time to get out of debt, it is now!  Debt diminishes our ability to make decisions for our future.  You will be able to pay off your debts and then if you take the monthly savings and put them back into your mortgage you can still pay off your mortgage faster than before you consolidated your debt!  Debt consolidation needs a strategy and I would love to help.

The decision to refinance your mortgage is not based on perception.  It should be purely based on the “numbers”.  In other words, I will calculate your new mortgage with the penalties etc. included and if you still save money over the next five years then it is a viable option.  However, if the calculations with the new mortgage reveal no savings, don’t refinance!

Thanks for reading….Please leave a comment below!