Back on April 19th CMHC announced their new rule changes. For Self Employed people these changes did not help. CMHC changed their rules for those Self Employed for more than 3 years. They need to qualify using traditional claimed income submitted to the government. This is usually based on the Average of the last 2 years income claimed on line 150 of your tax return. Some banks will even only use the lowest amount claimed of the two. All was lost, right?!?!? Wrong.
Canada Guaranty is the newest mortgage insurer on the block. They still believe in the self-employed and still have a stated income product available to those who may need it. Obviously the stated income part must be reasonable for the work field that you are in. Stated income is for those that are self-employed but write off most of their income and show very little on their personal tax returns.
Here is a few points and conditions to qualifying for the Stated Income Mortgage:
– Minimum 2 years business for self.
– 10% down payment for 700+ credit score
-15% down payment for 650-699 Credit score
– Up to 35 Year Amortization
– No credit delinquencies in the last 12 months. No mortgage defaults in the last 5 years, and no previous bankruptcies.
– Income taxes must be up to date
– No commission sales income.
– No gifted or borrowed down payments. Down payment must be from own resources.
There is still a few hoops that a person needs to go through to qualify for the Stated Income product, but it doable. None of these conditions are outrageous or odd. They are basic conditions for something that the bank and the insurer ask for in return of taking on something with a little more risk to them.
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Thank you for reading,
Don’t just get a mortgage, Know your mortgage!
Scott Bourke, AMP
Regional Mortgage Corporation
Red Deer, AB