I was recently asked how are ‘Business For Self’ people going to be able to qualify for a mortgage under the new financing rules. If you have to prove that you can service the mortgage from your income but do not declare all your income due to the offset of expenses or possibly a cash industry, how will you ever qualify!
I am in the process of finalizing a mortgage for a client that is basically in a cash industry at very decent rates. It is really important that as an entrepreneur, you deposit all your earnings in your savings or chequing account and not hide the cash under your mattress!! If you can show the monies being deposited into your account, I have lenders that will consider this as your income regardless what your tax return says.
As in everything else, the higher the risk the higher the interest rate but when you consider the benefit of your write offs and lower income taxes, it is worth paying the higher interest rate.
I have also been asked about Self Employed qualifying on renewal. At this time, you do not have to qualify when you renew your mortgage, only if you want to refinance your mortgage and take equity out of your home. Should you want to refinance, the same guidelines above will fall into play. Just make sure you deposit your income into your account to prove a paper trail.
Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville, Burlington, Mississauga and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.
To contact Colleen, please fill out the form on www.mortgagesbycolleen.ca or call 416-459-2406