Self Employed Solutions
This is a post from our Mortgage Broker Ken Styles from
Have you ever been turned down by your bank or credit union?
YOUR TAXABLE INCOME WASN'T HIGH ENOUGH.
I'm self-employed too, and I've been turned down. I know what it feels like. I know it's frustrating. As self-employed people, we want to write off everything possible. I think about what I can write off all the time. I even figured out how to writhe off hair-cuts. OF course, writing off everything we possibly can, sure helps reduce our taxes... But it doesn't help with the application to the bank.
Thankfully, not all lenders are the same. Some lenders will accept what you tell them you earn per year, without standard bank documentation. You can borrow up to 95% of the value of your home, it you are buying, and 80% if you are refinancing, without proving your income. Of course, to get that level of financing, without proving your income, you are going to need good credit. If your credit isn't good enough for that program, there are other programs available to get more like 65% of the value of the home. These lenders are giving you credit for running your business successfully and having a good track record of paying company and personal debt on time. The lender is also assessing what they think is reasonable for a person in your industry to earn. For example, if you own a plumbing company and have 8 employees, they will expect that you have the potential to earn more that if you are a plumber working for yourself.
You might be thinking, "the interest rate will be higher than your bank". Good news...if you qualify for the good credit program, the interest rate could be even less than the bank's rate.
I have been helping self-employed people get mortgages since I was turned down for the mortgage on my first home way back in 1979. I have attached a copy of what I call the mortgage pyramid. The best mortgage is at the top and the worst one is at the bottom (We won't work with the lenders at the very bottom). If you become on of our customers, our goal is to start you as high on the pyramid as possible, and if we need to move you up the scale, to get to the top, we provide you with the guidance necessary to get you there.
Centum Styes Mortgage Corp. 2358 Rozon Road Mill Bay BC V0R 2P4 Phone (250) 743-2509