Mortgage Broker Services
Self Employed Mortgages- Be Prepared it isn’t Simple!
Self employed individuals or BFS (Business for Self) make up 20% of income-producing Canadians.
Northwood Mortgage agents have accessibility to lenders who have come to realise the seriousness of the market and have designed mortgages specifically toward BFS entrepreneurs. Just because there are mortgage products marketed to you doesn’t mean they’re simple to get. Although these products are available they require solid preparation. As with all mortgages, proper planning and consultation with your mortgage specialist will avoid the many snafoos, delays and common mistakes made by people looking for mortgage funding.The good thing is you can get a mortgage for most purchases or purchase with improvements. You will be able to fund progress advances for new builds and refinance you current mortgage.
The BFS category is taking it just about on the nose when it comes to providing information to be accepted for a mortgage compared with employed individuals.
These are some of the rules:
– Good Credit-is an obvious but critical rule. A good score in the 700s will appeal to even the most discriminating bank.
– Debt-Your TDS, total debt service ratio, must be at least 42% but with a credit history over 680 can be 44%.
– Stableness-a established record of about 2 years positive revenue is mandatory.
– Income -you have to declare a reasonable income that is equivalent with your industry sector. You can’t be declaring $20,000 earnings if you’re a skilled workman in a business reporting $100,000.
– 3rd Party Verification -you have to provide verification that you have managed you finances and credit properly. Usually a fiscal statement prepared by your accountant.
– Loan to Value -you must have a loan to value ratio of 90% for a purchase or progress advance and 85% for a refinance.
– Maximum-Loans are capped at $750,000 though some case by case exceptions can be made. Equity take outs are capped at $200,000.
– Paperwork -2 years Notice of Assessment and T1 Generals, finance reports and/or HST return, business licence. These are on top of photo ID, and a completed mortgage application.
– Delinquencies, Bankruptcies or Tax Balance -forget about it you won’t qualify.
Talk with your mortgage agent to get all of the information required for a BFS mortgage. If you’re prepared and well documented it can be a breeze.