When you are working as your own boss, there are many benefits to enjoy. However, it can be difficult to obtain mortgages when you’re self-employed. Many applications like to see regular, stable working hours or salaries. However, that doesn’t mean you cannot obtain mortgages as an entrepreneur.

You may think that the process is different when applying for a mortgage as a self-employed individual. But, it is not all that different. There is more paperwork involved as lenders want to guarantee you bring in enough money to support the loan.

If you are self-employed, it would be a good idea to have the following documents prepared in advance of any mortgage applications:

• Business income financial statements
• Notice of Assessments for the last 2-3 years
• Proof of Personal Tax Return payments
• Any signed contracts that show upcoming revenue
• Your GST license and articles of incorporation
• A Down Payment

The image of instability with being self-employed is what hampers an entrepreneur’s mortgage application. That makes lenders flag you as a riskier borrower compared to other types of loans. This can result in loan dis-approval, as well as unsatisfactory rates and terms. To help alleviate any chances you won’t get approval or to show a lender you aren’t risky, here are some tips to follow:

Document Your Income and Employment

Have a strong paper trail of your income and employment record. Have your important tax documents for your business and yourself. Keep them easily accessible as they are vital to mortgage applications.

Separate Your Personal and Business Expenses

Lenders will ask what percentage of business income goes to your own salary, how tax payments are made, how much business income is generated and projected income. Having separate cards and accounts will help differentiate expenses for yourself and make tax returns easier. The documentation will also help lenders understand your financial situation and process your application smoothly.

Have A Good Credit Score

Like always, a good credit score helps you get approved for mortgage loans. Make sure you are able to pay off any debts outstanding before a mortgage application. If your score is low, work on steps to improve your credit by consolidating debt, making payments on time, or paying it all off if you can.

Work With A Broker

A qualified mortgage broker can help self-employed individuals navigate the paperwork required for self-employed mortgages, as well as provide advice and guidance to improve your chances of approval.

If you are a self-employed individual looking to get a mortgage in Ottawa, give us a call and we will gladly work with you to find the right mortgage for your needs.