Self Employment Mortgage

Self Employment Mortgage Guidelines Canada

Self employed borrowers:

* 2-years self-employed tenure is recommended, however will consider borrowers with less than 2-years BFS tenure depending on the length and type of previous employment.
* One (1) form of written third party documentation confirming self-employment tenure must be on file
* Lender is required to capture the borrower’s “Stated” income and submit to Genworth as part of the application.
* The “Stated” income should be reasonable based on the type and size of the business, and should be able to service the required mortgage as per the GDS/TDS Guidelines above
* Reasonableness of the income is a critical factor in the approval of the loan as is the borrower’s ability to service the loan and all other obligations

Commissioned sales:

* A commissioned sales applicant is defined as someone who derives 100% of their income from a commissioned source
* The lender is responsible for ensuring that the borrower is a commissioned sales applicant as defined above, with a minimum of two years tenure, for example by way of letter of employment, T1 Generals or T4’s
* Lender to ensure borrower(s) have no tax arrears (recent NOA will suffice)
* Commissioned sale applicants who are paid a salary plus commission are NOT eligible under this program and must qualify in the usual manner (e.g. GDSR/TDSR and income confirmation will be required)
* Lender is required to capture the borrower’s “Stated” income and submit to Genworth as part of the application.
* The “Stated” income should be reasonable based on the type and size of the business, and should be able to service the required mortgage as per the GDS/TDS Guidelines above
* Reasonableness of the income is a critical factor in the approval of the loan as is the borrower’s ability to service the loan and all other obligations

# Corporations
# A limited company or corporation is a legal entity, separate from the persons (all shareholders) who own it. The business can own assets, enter into contracts and conduct business transactions in its own capacity. The company is called limited because the liability of the shareholders is limited to their investment. All provincial Corporations must obtain articles of incorporation from the province in which they are registered or may be federally incorporated. The applicant’s personal income will be reported by T4 from the corporation.
# Documentation requirements – Any one of the following:

* Articles of incorporation
* Business Credit Report
* Audited Financial Statements for the last 2 years, prepared and signed by a CA

# Plus a recent Notice of Assessment or a signed affidavit by the borrower(s) to confirm no income tax arrears

Sole Proprietorship
# A one-owner operation where the owner directs all the activities of the business, assumes all authorities and obligations, and is liable for its business debts. The sole proprietor income is reported to revenue Canada on the standard tax return (T1 General) together with Revenue Canada’s required statement of business or professional activities.
# Documentation requirements – Any one of the following:

* Business License
* Business Credit Report
* GST/QST Return Summary
* T1 Generals with statement of business activities attached for a minimum 2 years
* Audited Financial Statements for the last 2 years, prepared and signed by a CA

# Plus a recent Notice of Assessment or a signed affidavit by the borrower(s) to confirm no income tax arrears
No Income Qualification (NIQ) programs

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