In the article titled “Mortgages and self-employed workers: stricter conditions to qualify,” published in Protégez-vous, John Fucale, Senior Vice-President of Broker Relations at Multi-Prêts Hypothèques, shares essential advice for self-employed individuals seeking a mortgage.
These workers, whether incorporated or not, face particular challenges with financial institutions, which scrutinize their applications more closely due to the less predictable nature of their income.
Increase your declared net income
To improve your chances of approval, one strategy is to increase the declared net income submitted to the lender by about 15%. “This amount reflects business-related expenses tied to your activity, such as office and transportation costs,” explains John Fucale. While these expenses are business deductions, they are directly linked to your work and contribute to your actual costs. “A broker can help you prepare this type of application file,” he adds.
Using income self-declaration
If your declared income appears insufficient to convince a lender, another option is to use income self-declaration. “Concretely, this involves completing a self-declaration form and providing the last 12 months of bank statements from the account where your business deposits are made,” explains John Fucale. This method allows lenders to gain a broader view of your financial situation and establish an eligible income that goes beyond your tax return alone.
Plan your mortgage application in advance
For those planning to buy a property, John Fucale recommends preparing your mortgage application well in advance. “Plan your application two to three years before purchasing by increasing your declared income,” he advises. This approach can help you qualify more easily and access more competitive interest rates. Long-term preparation allows you to present a stronger file to lenders and secure more favourable borrowing conditions.
Consult a mortgage broker for personalized support
Face à ces Given these challenges, the help of a mortgage broker is strongly recommended. They can guide you through the steps of preparing your application and help you find the best financing options suited to your situation.