Beginning January 1, 2013 there will be new Government of Canada changes in self employed mortgages.

The government has imposed new self employed requirements upon lenders as it relates to confirmation of income for business owners.

Mortgages are made up of a sum of our down payment, our credit, and our income.  In the cases of many self employed clients, they have the flexibility to show less personal income in lieu of their write offs and other tax planning.  For self employed mortgage lending in Canada, many lenders have specialized programs that allow for more flexible income underwriting in lieu of stronger down payment and good credit.

The government has made changes that lenders must implement that place much stronger restrictions upon how lenders determine reasonable income for self employed clients in these cases.  Previously, we would often confirm that our clients were self employed and the length of their self employment.  After that we would use a “reasonable” income based upon their industry and proceed with their approval.

Due to the new Government of Canada changes in self employed mortgages  – This is changing.

Lenders are going to be required to physically confirm the client’s income via either 3-6 months of business bank statements, company financials, and/ or tax returns.  This works just fine for some clients however for clients who are newly self employed or have a seasonal business this can be quite challenging.

If you have any questions or would like to discuss your unique options and solutions, please feel free to contact me at my direct line.

Rylan Hahn 403-802-7201