Self Employed Mortgages

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.

Nonetheless, if you want to maximize your chances of getting a mortgage loan while self-employed, here are some of the criteria you need to look out for:

Good credit score

Whether you're employed or self-employed, a good credit score is always a boost to your chances of getting a good deal on your mortgage applications. However, self-employed individuals can benefit best from a positive credit score and may even help them win the favor of the most discriminating lenders. Therefore, taking good care of your credit score always helps in getting an excellent mortgage rate, whether you're self-employed or employed somewhere else.

Established self-employment

You need to be self-employed for a considerable period of time. Lenders are more keen on trusting you with a mortgage as a self-employed borrower if you are able to show them your stability as a self-employed income-earner. Most lenders will require you to have at least a two-year track record in self employment, in order to satisfy one of their most critical lending requirements.

Your ability to provide sufficient documentation is also an important factor in getting a mortgage. As much as possible, you need to be able to back up your income records with income statements and tax returns so you can qualify better for a loan.

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