Apparently, self employed individuals make up roughly 15% of the Canada's labour force (noted in the CMHC link below). It is evident working in the industry as a mortgage professional, that its become difficult to apply for a mortgage. CMHC has announced that they revised their policy to make it easier to applying hopefully for a self employed mortgage. it should be noted, for reference, there are different programs when applying for a mortgage, pending the down payment. In this circumstance, we are referring to clients that are self employed and putting less than 20% down payment.
As of October 1, 2019 - the major changes include the following:
- Providing examples of factors that can be used to support the lender’s decision to lend to self-employed borrowers who have been operating their business for less than 24 months, or in the same line of work for less than 24 months such as acquiring an established business, sufficient cash reserves, predictable earnings and previous training and education; and
- Providing a broader range of documentation options to increase flexibility for satisfying income and employment requirements when qualifying self-employed borrowers such as the Notice of Assessment (NOA) accompanied by the T1 General, the CRA Proof of Income Statement and the Statement of Business or Professional Activities (T2125) to support an “add back” approach for grossing up income for sole proprietorship and partnerships.
For more information and the full article, please visit the below noted link: