Self-employed and business for self mortgages in Ontario

Your accountant's job is to reduce your taxable income. A bank's job is to lend against your taxable income. That collision is why a business owner earning $180,000 gets told they qualify like someone earning $60,000.

Who these programs are built for

• You are a sole proprietor, incorporated business owner or commission-earning contractor.
• You have been self-employed for less than two years and cannot show two years of filings.
• Your net income on paper is far below what your business actually generates.
• You write off aggressively and were declined for that exact reason.
• You are a new immigrant running a business in Canada with limited Canadian credit history.

What lenders will actually count

• Business for self lenders read business bank statements, gross revenue, invoices and contracts, not only line 15000 of your return.
• Add-backs count: capital cost allowance, business-use-of-home, one-time expenses and depreciation.
• Some programs use a stated income approach supported by twelve months of business deposits.
• Expect a higher rate than a fully qualified bank mortgage, and sometimes a lender fee.
• Treat it as a two or three year plan. Get the deal done now, build two clean years of filings, move to a prime lender at renewal.
• Talk to your accountant before you file in the year you plan to buy. What you write off decides what you qualify for.

Documents to gather

• Two years of T1 Generals with all schedules, plus Notices of Assessment
• Two years of business financial statements, or T2 corporate returns if incorporated
• Six to twelve months of business bank statements
• Articles of incorporation, master business licence or HST registration
• Confirmation the business is active: contracts, invoices or a client list
• Statement showing personal and business taxes are current with CRA
• Government photo ID and current mortgage or purchase documents

How we build the submission

1. 01 Map your real incomeWe work out what your income looks like after legitimate add-backs, and which lender programs recognise them.
2. 02 Match to the right lender tierSome prime lenders have genuine BFS programs. Where they do not fit, alternative lenders do. We start at the cheapest tier that will approve you.
3. 03 Build the submissionBFS files are won or lost on presentation. A clear income summary and a clean document package makes the difference between an approval and a decline.
4. 04 Plan the exitWe set a target renewal date and tell you exactly what your filings need to look like by then to qualify at prime rates.

Questions business owners ask

How long do I need to be self-employed to qualify?

Two years of filings opens the most doors. Under two years is workable when you have a prior track record in the same field, strong credit and a larger down payment, usually through alternative lenders.

Can I use my gross business revenue instead of net income?

Not directly, but several programs assess a percentage of gross revenue or use bank statement deposits as the income basis. That is precisely why these programs exist.

What down payment do I need?

Insured self-employed programs can go as low as 10% in some cases. Alternative lenders usually want 20% or more. Larger down payments open better rates.

Will I be stuck at a high rate forever?

No, if you plan for it. Two clean years of filings, current taxes and a good repayment record usually move a file to a prime lender at renewal. We set that plan out at the beginning.