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Self employed? Tips on getting your mortgage approved

SELF EMPLOYED TIPS ON HOW YOU CAN GET YOUR MORTGAGE APPROVED

Today's Mortgage TIPP # 1:

Self employed clients that :
- cannot prove income though their Notice of Assessments( show very little income compared with the gross income they make)
-are incorporated
-have been in business for more than 3 years

You MUST have:

-
income taxes paid in full
- Financial Statements prepared by a certified accountant
-NOT SHOW A LOSS (DEFICIT) ON THE FINANCIAL STATEMENTS FOR THE LAST 2 YEARS.

If you show a loss, the reinsurers and lenders are going to decline their approval!!!

Once a decline is issued by the reinsurer, you have to wait until next year to buy a property, until the Financial Statements are going to be prepared again.


TIPP 2 !!!

Commissioned sales: YOU MUST ALWAYS PROVE THE INCOME

TIPP 3 !!!

Self employed clients that cannot prove income cannot be PREAPPROVED!
A pre-approval is JUST A RATE HOLD, an piece of paper issued electronically by the computer!

A pre-approval can be issued only for salaried clients and self-employed clients who show enough income on their Line 150 to sustain the mortgage!

 Lenders do not hold rates for these type of clients
.

VERY IMPORTANT!

A pre-approval does not guarantee you a FINAL APPROVAL. Your file still have to go through underwriting process ( lender and re-insurer) and your documents still need to be verified by the bank.

TO AVOID THE SITUATIONS LISTED ABOVE, YOU MUST HAVE A DOWN PAYMENT OF 20-25% OR MORE, AND USE A LENDER THAT HAS HIGHER INTEREST RATES AND FEES.

Please make sure you contact your mortgage broker months ahead of the purchase process, to avoid your mortgage decline