STEVE FOSTER  AMP

Accredited Mortgage Professional

MORTGAGE CONSULTANT

TMG THE MORTGAGE GROUP CANADA INC.

Direct: 604-828-1721

steve@stevefoster.com
 

NO INCOME QUALIFIER

Self-employed individuals present a special challenge for lenders.. Being self-employed can mean fluctuating income levels, and having the ability to utilize write-offs.  After writing down income, many self-employed are unable to qualify for traditional mortgages. 

Finally, lenders are paying attention to the  the growing number of self-employed individuals in Canada. They have designed programs to serve this market by offering  No Income Qualifier (NIQ) programs. These mortgages require no income verification. The borrower does however have to prove self-employment by means of relevant paperwork, and a  copy of their Notice of Assessment to prove that they do not owe the government back taxes. 

It is  possible, with mortgage insurance from GE Mortgage Insurance Company (GEMICO), to obtain a mortgage with a down payment as low as 10%. GEMICO is looking for businesspeople who have good credit (minimum credit score of 680) and been in the business for at least 3 years. 

There are sub-prime lenders that will consider self-employed individuals on a high-ratio basis, if credit is less than perfect. Rates will of course be higher, and fees may apply, but these applications can be considered

If the borrower wishes to  provide full documentation, he/she can qualify under traditional lending programs. For conventional mortgages ( the borrower has at least 25% down payment), the rules for qualification will vary from lender to lender. On high ratio mortgages, the lender will have to comply with the mortgage insurance companies guidelines. (CMHC or GE). 

Borrowers should be prepared to provide complete paperwork for these traditional programs. Required documentation includes T-1 General (3 years), full "Statement of Business Activities" (3 years), Notice of Assessment (3 years). Lenders may allow add backs for depreciation, salary paid to owner/spouse, rent paid to owner (such as in a home office). Most lenders will be looking to establish the average income for the past 3 years.

No Income Qualification (NIQ)

There are a  variety of programs available. Please call me to discuss which one would be best for you.

Direct 604-828-1721

Undocumented income

Wells Fargo has a program which allows individuals such as the self-employed or those with undocumented income (e.g., tips) to use that income to qualify for a mortgage.  Up to 90% financing is available.  The borrower's credit score cannot be lower than  600 to qualify.

Wells Fargo will attempt to verify your income in other ways.  They may require your bank statements for the past 12 months. Or, if you earn tips, they will talk to your employer to verify reasonableness of your claimed income.

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