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20 Aug

How Self-Employed Borrowers Can Qualify for a Mortgage

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Posted by: Gavin Toor

How Self-Employed Borrowers Can Qualify for a Mortgage

By Gavin Toor — Mortgage Broker, Volterra Capital Corp.

Why Getting a Mortgage is Different for Self-Employed Borrowers

If you’re a business owner, freelancer, contractor, or incorporated professional, qualifying for a mortgage can feel more complicated than it is for salaried employees.

While self-employment gives you freedom, it also means your income may not be as straightforward on paper — especially if you use legitimate tax deductions to reduce taxable income.
This can sometimes make it harder to meet traditional lender requirements.

The good news? There are special mortgage programs and alternative solutions designed just for self-employed Canadians.

Common Challenges for Self-Employed Borrowers

  • Lower reported income due to tax write-offs.

  • Irregular income patterns throughout the year.

  • Shorter work history if your business is new.

  • Difficulty proving income with standard documents like T4s and pay stubs.

Mortgage Programs for Self-Employed Borrowers

1. Stated Income Programs

For borrowers who can’t fully verify income through traditional means, stated income mortgages allow you to declare your reasonable annual income based on your business’s performance and industry norms.

  • Lenders assess your stated income alongside your credit history, business stability, and down payment.

  • Often requires a larger down payment (typically 20%+).

2. Dividend Income Qualification

If you pay yourself through dividends instead of salary, some lenders will use this income to qualify you — especially if it’s consistent and supported by corporate financial statements.

  • Dividend income can be grossed-up for qualification purposes.

  • Ideal for incorporated business owners who retain earnings in their company.

3. Gross-Up and Add-Back Policies

Many lenders will “gross up” certain income types or “add back” legitimate business expenses to increase your qualifying income.
Examples include:

  • Vehicle expenses.

  • Home office deductions.

  • Capital cost allowances (CCA).

This can significantly improve your borrowing power.

4. Alternative & B-Lender Solutions

If you don’t fit the exact guidelines of a major bank, alternative lenders can be more flexible with documentation and income verification.

  • May accept bank statements as proof of income.

  • Shorter history of self-employment (as little as 6–12 months).

  • Slightly higher interest rates, but greater approval flexibility.

5. CMHC & Insured Self-Employed Programs

Both CMHC and Sagen offer insured mortgage options for self-employed borrowers who can provide a reasonable income declaration and meet credit requirements.

  • Allows down payments as low as 5% in some cases.

  • Good credit and strong business track record required.

Tips to Improve Mortgage Approval Chances

  1. Keep your business and personal finances separate — clear records make underwriting easier.

  2. File your taxes on time and keep at least 2 years of Notices of Assessment (NOAs).

  3. Maintain strong credit — aim for a score of 680+.

  4. Save for a larger down payment to access more lending options.

  5. Work with a mortgage broker who understands self-employed lending programs.

Why Work With a Mortgage Broker

As a mortgage broker, I work with self-employed clients to:

  • Access specialized self-employed programs like stated income, dividend income, and bank statement mortgages.

  • Compare options from major banks, credit unions, and alternative lenders.

  • Structure your file to highlight your true income and business stability.

📞 Let’s Talk About Your Mortgage Options
Whether you’re an incorporated professional, small business owner, or contractor, I can help you qualify for the mortgage you need — even if your income is unconventional.

Gavin Toor — Mortgage Broker, Volterra Capital Corp.
📱 604-835-4999 | ✉️ gavintoormortgages@gmail.com
🌐 gavintoormortgages.com