One bank is now adding up to 60% of the net business income to the personal income of self-employed individuals to calculate the mortgage amount they qualify for!
Even better is that this applies to income properties too!! It’s a great way for self-employed people to buy properties at great rates.
If you’re a self-employed, permanent Canadian Resident paying taxes in Canada, have moderate personal income from a Canadian-registered incorporated business, you’ll want to read more or contact PFG Financial for more information.
This bank program is an additional mortgage solution:
- For customers with moderate personal income who also have income in their operating companies
- Allowing the use of the operating company’s Net Income After Taxes (NIAT) to lower the applicant’s TDSR
- Maximum Net Income After Tax (NIAT) Allowance – bank will consider an allowance of 40% – 60% of NIAT less dividends paid
Borrower’s Qualifications must include:
- Permanent Canadian Resident, paying taxes in Canada
- Business must be Canadian registered and pay Canadian taxes
- Customers with incorporated companies only
- All the shareholders of the company must be on the mortgage
- Business must be 100% owned by the borrower(s) on the application
Loan Purpose must be to:
- Purchase
- Refinance
- Switch
- Switch with additional funds
Eligible Properties:
- Primary residence
- Secondary residence / vacation property homes
- Rental properties
Excluded Properties:
- Mobile Homes
- Non-personal residential mortgages
- Progress draw mortgages
- Mortgages under any other specialty financing programs
Maximum loan to value ratio:
- Up to 80% LVR (Loan-to-value sliding scales apply)
- Program’s maximum global limit is 80% of lending value
Amortization: Maximum 30 years
Down Payment: Standard requirements apply
Payment Frequencies: Any day monthly (except 29th,30th, and 31st), weekly, biweekly
Documentation Requirements:
Personal:
- 2 years Notice of Assessment and 2 years T1 Generals
- Mortgage and property title must be in the individual borrower’s name, not a company name
- Note: RRSP withdrawals and foreign sources of income are not eligible
Additional requirements:
- Business: 2 years of professional accountant prepared financial statements including a signed Notice to Reader
- Articles of Incorporation or corporate search from provincial registry or T2 and schedule 50
- Note: Business must show positive income in all years of evaluation period and all documentation must be provided at time of application.
If you’re self-employed and want to “cash in” on some mortgage help, we have more details on this program and can direct you to the source. Contact your PFG Financial consultant today or book a call with us for further information.
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