What lenders look at
Lenders want to see that your income is steady. If you're self-employed, they usually ask for:
- your last two years of personal tax returns and Notices of Assessment
- proof your business is running, like a business registration, articles of incorporation or financial statements
- recent bank statements
Most lenders work from the income on your tax returns, after write-offs. Big write-offs lower your taxes, but they also lower the income a lender sees.
Less than two years in business?
Some lenders will consider a shorter history, especially if you did the same work as an employee before. A larger down payment can help.
Make your application stronger
- Pay your taxes. Lenders check your Notice of Assessment for any balance owing to the CRA.
- Keep business and personal money separate. It makes your income much easier to show.
- Save a bigger down payment if you can.
- Look after your credit. Pay bills on time and avoid new debt before you buy.
- Plan ahead. Talk to a lender or mortgage broker a year or so before you want to buy, so you and your accountant can plan how you report income.
Insured or not
With less than 20% down, your mortgage must be insured, and insurers have their own rules for self-employed buyers. With 20% or more down, more lenders have room to be flexible. Some lenders specialize in self-employed buyers, usually at a higher rate. A mortgage broker can compare them for you.
Documents to gather
- two years of tax returns and Notices of Assessment
- business registration or articles of incorporation
- business financial statements, if you have them
- 3 to 6 months of business and personal bank statements
- proof of your down payment
- a list of your debts and monthly payments
Once you know your number, try it in my mortgage calculator.
Lender rules vary and change. Check with a lender or mortgage broker.