Mortgage for Self Employed or Incorporated Individuals
What can be better than to save on your taxes!
Obviously, it’s great, however, not as much if you are planning to purchase a property in Canada. Banks don’t mind if you are self-employed, however, will base the mortgage amount on the net income (line 15000) on your notice of Assessment.
Is there any way to go around it? To both save on your taxes and get a mortgage?
Yes, we have few solutions here, but they are more expensive and will cost you a bit of money; however, if you can save 50-100K on taxes, and pay 10K to get a mortgage with a slightly higher interest rate, it is worth it.
We call those mortgages – B mortgages, or, stated income mortgage.
What do you need to qualify for that mortgage?
- You need to be self-employed or incorporated
- Bank uses your gross income to qualify (they look and 3-6 months of business income)
- You have to have a good credit history
- You have to put at least 20% down (and 25% on apartments)
- You have to pay around 1% – 1.5% lender fees from your pocket.
Since mortgage rates went down significantly, B lenders also reduced their rates. It’s currently 2.99% for 2 years fixed.
Each situation is unique and different; especially if you are self-employed.
It’s important to have an experienced mortgage broker who knows what B lender is offering and can find the best solution in each personal situation.