Mortgage lenders have recognized this need and now virtually all banks and institutional lenders have a self employed mortgage program that you can consider if you fall into this category.
While self employed home loans are more common and fairly easy to come by, there are some things you can do to make sure you’re getting the best deal out there.
First, where possible, try to avoid mortgage requirements above 80% loan to value. Insured mortgages for the self employed come with a higher insurance premium to cover higher perceived risk of loss to the lender. And if a maximum lending amount is required, the insurance premium, as a percentage of the loan only goes up.
Second, make sure that maintain your credit score at or above 750. While there is no magic number for credit across the board, higher credit ratings are going to represent a stronger case for better rates and terms than will lower rates.
Third, try to show as clear a path as possible in your financial statements to your personally available cash flow. While self employed mortgages do allow you declare your income with additional support, the easier income and cash flow are to provide, the stronger your case is going to be for the best available rates and terms.
To be clear, the above points are not requirements to getting a Toronto self employed mortgage for a residential home mortgage applicant, but are geared more towards to securing the best deal possible from these programs. As a self employed individual that does not receive a regular pay check from an employer, you’re going to fall under these programs. So it only makes sense to manage these variables, within reason, to get the best deal possible which is going to be money in your pocket over time.
If you’d like to consider your options for Toronto self employed mortgages now or in the future and want to come up with a plan to get the best deal out there at a given point in time, we suggest that you give us a call so we can go through your requirements and financial profile with you and provide recommendations for achieving your mortgage goals.