What’s the Best Way to Get a Mortgage If You’re Self-Employed in Canada?

Securing a mortgage is a big step, but if you’re self-employed, it can feel like a mountain instead of a hill. The truth is, being your own boss doesn’t mean you’re locked out of homeownership—it just means you need the right approach. As a mortgage broker in Ontario, I’ve worked with countless self-employed individuals to help them achieve their homeownership dreams. Here’s how you can do the same.

Understanding the Challenges

When you’re self-employed, lenders see you differently than someone with a steady paycheck. Why? Because:

• Your income might fluctuate throughout the year.
• Your reported income might look lower due to tax deductions (a perk of being your own boss).
• Lenders often require more paperwork to verify your financial stability.

A recent report from the Canada Mortgage and Housing Corporation (CMHC) highlights that nearly 15% of Canadian workers are self-employed—a significant portion of the population that deserves access to fair mortgage options.

Key Documents You’ll Need

To show lenders you’re a strong candidate, be prepared with:

• Tax Returns: Usually for the past two or three years.
• Notice of Assessments (NOAs): These verify the taxes you’ve paid.
• Business Financial Statements: Proof your business is profitable.
• Proof of Income: Contracts, invoices, or bank statements demonstrating consistent revenue.
• Credit Score Report: A good credit score signals you’re reliable.

Strengthen Your Mortgage Application

1. Keep Organized Financial Records: Clean bookkeeping shows lenders you’re financially responsible. Consider working with a professional accountant.
2. Separate Business and Personal Finances: This helps paint a clearer picture of your financial situation.
3. Boost Your Credit Score: Pay bills on time, reduce your debt load, and keep your credit utilization low.
4. Save for a Larger Down Payment: A bigger down payment reduces the lender’s risk and improves your approval chances.
5. Balance Tax Deductions and Income Reporting: While writing off expenses minimizes taxes, it can also reduce your reported income, which lenders rely on for qualification.

Explore Mortgage Options

Self-employed Canadians have a variety of mortgage solutions available:

• Traditional Lenders: Big banks often require more paperwork but offer competitive rates if you meet their criteria.
• Alternative Lenders: These lenders have more flexibility and may be a good option if your financials don’t meet traditional requirements.
• Private Mortgage Lenders: While rates may be higher, these lenders are more lenient with qualifications.

For example, Scotiabank offers specialized mortgage solutions tailored to self-employed individuals. Doing your research can open doors to options you didn’t know existed.

Work with a Mortgage Broker

This is where I come in. As an experienced mortgage broker in Niagara and St. Catharines, I understand the hurdles self-employed individuals face. My role is to:

• Connect you with lenders who understand self-employment.
• Simplify the paperwork and approval process.
• Help you secure the best possible rate based on your unique situation.

Also Read: Can Mortgages Be Paid Off Early in Ontario Canada?

Avoid Common Mistakes

1. Underreporting Income: While it saves on taxes, it could hurt your borrowing power.
2. Inconsistent Documentation: Missing or disorganized paperwork can delay or derail your application.
3. Not Shopping Around: Lenders differ in their approach to self-employed applicants—don’t settle for the first offer.

Take the Next Step

Getting a mortgage as a self-employed individual doesn’t have to be daunting. With the right preparation, documentation, and guidance, you can secure financing for the home of your dreams.

If you’re self-employed and ready to explore your mortgage options, I’m here to help. At Wilson Mortgage, we specialize in helping self-employed Canadians navigate the mortgage process. Contact me today or call at 1-800-969-0014 to schedule a consultation. Let’s turn your dream of homeownership into reality!