Self Employed Mortgages
Factors Affecting Mortgage Rates for Self Employed
Self-employed Canadians who are looking for excellent mortgage offers need to factor in a few things when dealing with a lender. If you don't have a steady pay check but you plan on getting a mortgage all the same, here are a few things you need to remember:
Good credit history
If want to maximize your chances of getting a good deal on your mortgage application, it is important for you to maintain excellent credit. This is especially critical if you are self-employed or if you don't have any employer to back you up. A good credit history will show the lenders that you will be able to handle mortgage applications in the future. (grab your credit report for free here)
Number of years you have been self-employed
The number of years that you've been self employed is also a crucial factor for most lenders. In order to enjoy good mortgage rates, you need to be in a self-employed status for at least two years. This is one of the most important factors considered by lenders when providing mortgage rates to self-employed individuals.
Steady stream of net income
If you are self-employed, it is also crucial for you to have a steady stream of net income to help lenders verify whether you will be capable in handling your mortgage responsibilities in the future or not. A steady stream of income indicates stability in your self-employed profession or small-time business.
Self-employed individuals normally have a more challenging time when it comes to mortgage applications. However, with a good credit history and an established business, getting excellent mortgage rates is always possible.
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Before you Apply: Check Your Credit Score
There's no question about it, the self employed will always face greater scrutiny when it comes to getting a Mortgage. Often times lenders will use your Personal Credit History as a qualifying factor. It pays to make sure that you monitor this important information - and possibly make updates and/or changes before you apply. Want to know where you stand?
What's New?
Typical Lending Criteria for the Self Employed
Compared to employed individuals, most self-employed persons, whether in Canada or anywhere else, have a more difficult time getting accepted for a mortgage. The ideal image of a borrower by most lenders is one who is stable and has a consistent stream of income as an employee.
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