Obtaining a mortgage for self-employed in Ontario can be a daunting task. If you are a self-employed professional, most of the odds will be against you. The procedure is complicated, but that doesn’t mean you will miss out on the possibilities. In this blog, you will gain certain information that will help you in the near future.
What Are the Documents that You Need to Provide While Applying for a Mortgage?
If you are willing to apply for a mortgage, you will have to provide the following documents that are mentioned below:
- Identity proof that will reveal your authenticity.
- Bank statements that will act as proof of income. You can also use them for several other purposes, such as estimating your expenditure.
- Address proof such as bank statements, utility bills etc.
- Your lender might ask you to provide proof of deposit. You will have to offer them a bank statement that deals with the funds you have set aside.
- They can ask you to provide certain information about the expenses. This will help your lender gain insights regarding house costs, pension contributions, childcare costs etc.
How Can You Get a Self-Employed Mortgage?
There are certain things that you need to learn if you are willing to achieve a mortgage for self-employed Ontario:
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Maintain Your Credit Score
If you have built up an excellent credit score, obtaining the mortgage will increase significantly. It can also enable you to qualify for a lower interest rate. Hence, before applying for a mortgage, please look at your credit score and try to improve it. The lenders will look at you as a credible and reliable customer.
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Stay Serious Throughout the Process
If you are confident enough to become a house owner, you must not take a step back from applying for a mortgage. A lender might refuse to provide mortgages to self-employed borrowers if they do not find you dedicated. However, if you stay true to your intentions, the lenders can process your application.
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Potential Self-Employment History
If you show your strong self-employment history to the lenders, they will agree to work with you. If you have an account of at least two years, you can apply for the mortgage process with utmost ease.
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Provide All the Required Documentations
As a mortgage borrower, you need to provide them with several documents such as a profit and loss statement, previous year’s tax returns, income verification documents and balance sheets. It will increase your chance to get qualifying for a home loan. Make a plan beforehand and keep these documents ready to serve the primary purpose whenever required. The lender might also ask for some other necessary documents such as:
- List of assets that includes investment accounts and saving accounts.
- List of monthly payments and debts for your business.
- Verify your self-employed status, such as letters from clients, business license, certain statements from your accountant etc.
- Social security, alimony and other additional income sources.
- Proof of mortgage payments or current rent.
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The Bottom Line
Life is not a bed of roses, but you can avoid the thorns if you act wisely. As a self-employed borrower, you need to hold your patience without giving up. Apart from that, you can also opt for private second mortgages in Ontario.
