Self-Employed Mortgages: Income and Documents

The short answer: Your business revenue isn't automatically your qualifying income. Expenses, ownership and how the lender calculates income all matter. Find out which number the lender will use before you set your budget.

 

How lenders read your income

Have these ready:

• Personal tax returns and Notices of Assessment

• Business financial statements and proof of ownership

• Bank statements that back up your income

• Any taxes owing and payment arrangements

• Proof of your down payment, and how any company funds will move to you

If you're incorporated, your salary, dividends and money left in the company aren't treated the same by every lender.

 

Revenue vs. qualifying income

Deposits into your account aren't the same as income. Expenses, taxes and business debt reduce what's left. Some lenders offer programs that look at your income differently, but the rate, fees and loan amounts can change.

 

Plan ahead

Talk to us before you make an offer. Writing off more expenses lowers your tax bill, but it can also lower what a lender says you earn. Talk to your accountant about tax, and to us about qualifying. Never change or inflate documents.

 

Explain the bumps

A big jump in revenue, a down year or a large one-time expense needs a short explanation with documents to back it up. A new contract helps, but money you expect to earn isn't the same as money you've already earned.

 

Compare your options

One lender may only use your taxable income. Another may look at bank statements or other proof. The bigger approval isn't always the better deal. Compare rate, fees, term and what it'll take to move to a cheaper lender later.

 

Related guides

• Mortgage Pre-Approval

• Mortgages With Credit Challenges

• The Mortgage Stress Test

 

Let's talk it through

Book a call and we'll go over your options with you.

Alberta: 587-900-0036 | BC: 604-200-3228

 

These guides are general information, not a mortgage offer or personal advice. Every approval depends on lender review of your income, credit, property and documents. Elevate Lending, powered by BRX, serves clients in Alberta and British Columbia.