October 17, 2019
5 Things You Need to Know About Self-Employed Mortgages
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Manzeel is an award-winning Mortgage Broker and the Owner of the Toronto-based mortgage, Everything Mortgages.
With 16 years of experience in the Canadian mortgage industry and a formal background in mortgage underwriting, Manzeel’s lending expertise gives him unique insight into whether a deal is feasible which empowers his clients to make more informed lending decisions faster.
He has been recognized as one of Canada’s Top 10 Mortgage Brokers by the national Canadian Mortgage Professionals (CMP) Association. Him and his team of 18 mortgage agents are proud to offer a mortgage experience that's built on honesty, trust, and integrity. He prides himself on the brokerage’s dedication to deliver an excellent client experience throughout the entire home loan process from pre-approval to post-funding.
Since moving to Toronto in 1998, Manzeel has successfully launched and scaled several businesses from the ground up, ranging from a mortgage brokerage and a vast real estate investment portfolio to a private financing eCommerce platform. He continues to be a leader in the real estate industry as he uses his analytical expertise to seek new real estate investment opportunities.
As a tech junkie and avid sports enthusiast, when Manzeel’s not working with clients, you can find him reading technology blogs, playing squash or watching tennis with his two boys.
Are you self-employed, who wants to get a mortgage? You might be put off by the common belief that getting a mortgage when you’re self-employed is almost impossible. Believe us, that’s possible. The thing is that you need to be more organized in your approach to managing finances.
Here are 5 things you should know as a small business owner, freelancer or contractor to give yourself the best chance of having your mortgage application approved.
#1 Proving your income
In fact, the longer you’ve been self-employed, the higher your chances are. If you have 3 years of accounts, you’ll have more choice of lenders; 4 years is even better.
Mortgage providers will also want to see the income you’ve reported and the tax paid.
You can verify your income manually by requesting documents through a tenant screening company or through a property management service.
#2 What type of business is it easiest to get a mortgage with?
Sole trader or Limited company
If you’re a sole trader, you and your business are legally the same entity and all profits belong to you. It’s these profits that a mortgage lender will assess. Lenders will check to see if your income has increased or decreased in recent years.
For limited companies, the business is a separate legal entity from the business owner. Most mortgage providers focus on the owner’s income from a basic salary and dividend payments. Your business accounts are also likely to be looked at as an indication of your reliability, so make sure they’re updated.
#3 Mortgage calculators
Everyone wants to know what is a mortgage going to cost him each month. Here are some mortgage calculators we offer our clients, so they can get a quick idea.
– Maximum Mortgage
– Mortgage Analyzer
– Payment Analyzer
#4 Avoiding the red flags
All self-employed mortgage applicants can expect potential lenders to go through their outgoings with a fine-tooth comb. For six months prior to making an application, it’s important to rein back spending on “luxury” items and to completely avoid things lenders might see as “red flags” (online gambling, payday loans, etc.). The lower your loan-to-value (LTV), the more competitive rates you’ll be offered.
#5 Good Credit
All borrowers today need good credit to be offered the best mortgage rates for a self-employed loan. Some lenders consider self-employment income as a higher risk than regular paychecks, so a high credit score can cover your potential risk factors and give lender confidence when considering you for a loan.
Low rates and excellent options for self-employed individuals looking to get mortgage financing.
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