Self-Employed Mortgages
Self-Employed Mortgages in Vancouver, BC and Alberta
Self-employed borrowers can get a mortgage through a bank using two years of documented income, through an alternative lender using bank statements or stated income, or through a private lender based on property equity. Sasha arranges all three routes for self-employed buyers across BC and Alberta.
Who counts as self-employed
If you earn your income outside a regular paycheque, lenders treat your file a little differently.
Sole proprietors and contractors
Independent contractors and anyone who runs a business under their own name.
Incorporated business owners
Owners who pay themselves salary, dividends or both.
Commission, gig and freelance
Commission-based earners and gig or freelance workers.
Multiple businesses or partners
Owners of several businesses, or partners in a firm.
Three ways self-employed borrowers qualify
Which route fits depends on how your income shows up on paper and how much equity you have.
Bank or monoline lender
The lender uses your documented taxable income, often averaged over two years.
Alternative lender
More flexible about how income is proven, for example with bank statements or stated income. Expect a higher rate and fee, and often a larger down payment.
Private lender
Focuses on the equity in the property rather than your income. Short term and higher cost, so it works best with a plan to move to a bank or alternative lender.
Documents lenders usually ask for
- Two years of T1 Generals and Notices of Assessment
- For incorporated owners: corporate financial statements and the corporate tax filings
- Business registration or incorporation documents, and any required licences
- Recent personal and business bank statements
- Proof of the down payment and its source
- Confirmation that you have no CRA balance owing, or a payment plan in place
Ways to strengthen your application
- Keep personal and business finances separate and your bookkeeping current.
- File your taxes on time and settle any CRA balance before applying.
- Avoid taking on new debt, such as a vehicle loan, in the months before you apply.
- Talk to a broker before you finalize deductions at tax time if you plan to buy soon, because the income you report is the income lenders see.
- Save a larger down payment if your income is hard to document. It widens your options.
Self-employed mortgages in BC and Alberta
Sasha is licensed in both provinces and arranges self-employed mortgages in each.
Vancouver, the Lower Mainland and across BC
BCFSA Lic. #154371.
Properties across Alberta
Alberta Lic. #00132955. Alberta has no provincial land transfer tax, though a land titles registration fee applies.
Lenders qualify you on the income you report to the CRA in either province. Rates, fees and lender criteria vary by lender and property, so ask for a current quote on your file.
Frequently asked questions
Can I get a mortgage if I have been self-employed for less than two years?
It is harder but sometimes possible. Many lenders want two years of self-employment history, though some will consider a shorter history if you worked in the same field before going out on your own. A larger down payment helps.
What if I write off most of my income?
Lenders generally qualify you on the income you report to the CRA. If deductions make your taxable income low, a bank may offer a smaller mortgage than you expected. Alternative lenders may use bank statements or stated income instead, usually at a higher rate and with a larger down payment.
Do self-employed borrowers pay higher rates?
Not always. A self-employed borrower with two years of strong, documented income can qualify with the same lenders and rates as an employee. Rates tend to be higher when income is verified another way, such as bank statements or stated income.
How much down payment do self-employed buyers need?
The federal minimum applies to everyone: 5% on the first $500,000 and 10% on the portion up to $1.5 million. A self-employed borrower whose income is harder to verify may need more, depending on the lender and the program.
Do you arrange self-employed mortgages in Alberta?
Yes. Sasha is licensed in both BC and Alberta and arranges self-employed mortgages for properties in either province. Lender criteria vary by property and market, so ask for a current quote on your file.
Talk to Sasha about your mortgage
Tell her about your situation and she will walk you through your options. Available Monday to Saturday, 8am to 8pm Pacific.