The most difficult challenge given today aside from credit history is historically proving income. The economy of today promotes to a certain degree the "cash" transaction. Alternatively, accounting practices generally tend towards minimal personal income tax paid by the proprietor(s). Thus the "self-employed" may be in a better position from the outside looking in, however financial institutions generally look for stability and a clients "proven" history to pay. The options in lenders fall into 2 categories; Equity (appraisal value) or Income/Credit/Debt Servicing.

Equity Lenders:

The generalized philosophy of an equity lender is the "Appraised Value" of a "Marketable Property". The power and focus of these lenders is primarily on the "bricks and mortar value" with secondary consideration given to ability to pay. Let this not be confused with "not having to pay". Equity lenders are in the business of financial loans secured by mortgages. They expect to get paid as does any other business, and if a mortgage is in default they are quick to react. Equity lenders can be a powerful ally so please read on.

A Self-Declared income letter is all that is required to be filled out by the individuals on title. The traditional Canada Customs and Revenue Agency (CCRA) Notice of Assessments are not necessarily requested.

Interest rates will be reflective of ones Credit History (Equifax: Beacon Score) and the Term of the mortgage. Traditional Banks will usually offer slightly better rates than an Equity Lender, however the Equity lender funds mortgages where Traditional Banks usually/traditionally say NO.

Mortgage amounts may generally be calculated at 75% of the Purchase Price or Appraised Value whichever is "LOWER". In the case of a refinance the rule will of course be 75% of the appraised value. Make no mistake that these Equity Lenders have their own designated appraisers. An appraisal by anyone else will just be a waste of your money.

Most "No Income Verification Mortgages" Require Revenue Canada Notice Of Assessment To Confirm That You Don't Owe Any Income Taxes - WE DON'T!

This product is great for self-employed who can't qualify for a regular mortgage financing due to many business write-offs. If you can meet the product guidelines below, we will not ask you for any income verification - not even Revenue Canada Notices of Assessments! Furthermore, if your credit is not exactly perfect and can't meet this product guidelines, don't worry - we approve virtually all applications up to 75% of your home value If you can't prove income - we can provide you with a mortgage up to 75% of your home value (appraised) without income verification! This product is available for properties located within short driving distance to major Canadian cities with a minimum population 100,000.

Did you know…
… that in January 2005 CMHC improved access to the full spectrum of the homeowner mortgage insurance products for self-employed Canadians?

Want to learn more?
Visit CMHC website at www.cmhc.ca

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