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What Makes a Self-Employed Mortgage Different?

All mortgage lenders need assurances that your income is sufficient to repay the loan. It is easy enough for them to have confidence that an employer accurately reports your wages, but it gets a bit murky when self- reporting of income is in play. When you are self-employed, you are reporting your income based on your record-keeping. That leaves room for both accidental and intended deviances from real numbers. It might seem that a self-employed mortgage would prove challenging to obtain, but there are ways you can become an attractive mortgage candidate despite being self-employed.

  • Expect to provide more paperwork than you would have as an employee. Substantiating documents to major line items on your financials can go a long way to convincing a lender to work with you.
  • Be sure your credit score is healthy before applying for a mortgage. The higher your score, the more attractive you’ll appear and the lower interest rate you could obtain.
  • Plan to put down a larger down payment. The more “skin in the game” you have, the happier a lender will be. You show not only financial acumen and responsibility but also lower their risk.
  • Don’t spend all your cash reserves on the property. You’ll be seen as more financially stable if you aren’t scraping the bottom of the barrel to purchase the property.
  • Work with a mortgage broker. A mortgage broker connected with lenders that routinely respond favourably to applications for a self-employed mortgage is going to be a huge asset. They can also help you get everything in order before applying so that you look as good as possible to mortgage lenders.

At Donna Mullen & Associates, our more than 25 years of financial industry experience puts us in the unique position to assist you with a self-employed mortgage. We will work diligently on your behalf to get you the most favourable terms and the approval you deserve. Reach out today to learn more about what our team can do to help.