How Do Self Employed Individuals Apply for a Mortgage in Canada?
If any of the Above Questions Answers you a Yes, the Read ahead, you may need it.
- Self Employed?
- Seeking a Mortgage?
- Earn Seasonal Incomes?
- Can’t give a Fixed Income Fore Caste?
Your Income May become an Two Edged Sword
Generally one’s borrowing capacity is based on his/her forecasted income, which in case of self-employed individuals, is itself based on his/her previous performances. Once you have showed less income on your tax papers, a low income is what your mortgage lender would also see. Though they know it is much less than what you actually took home, the lenders stay helpless and ought to give you a higher rate in respect to the displayed income. Increasing such income would simply make you increase your taxes, which is much sharper than the other edge.
Your Credit Score is considered everything
As most of your documents cannot forecast your future business performance your past debt repayment record, which is your credit score will be repeatedly highlighted. If you maintain a good credit score you can use it as a strong base on how seriously you take your due payments. Credit scores can be checked online easily which can help you track your mistakes and steps easily.
Have Your Taxes Covered up to Date
Documents that have to be submitted while filling a mortgage are quite a few. In case of employed individuals, most of their taxes are deducted or in other cases are collected well on time. But in case of self-employed individuals it is usually the penalties that get us to pay the taxes on a particular date. And if the penalties are not that significant, we might as well forget what taxes are. But in case of a mortgage application of a self-employed individual, it is preferable to have taxed paid on time and consistently