Self-Employed and Getting a Mortgage: Get your Documents Ready!

For the past two weeks we’ve been exploring the different ways to get around the obstacles of obtaining a mortgage when you’re self-employed, and the many options that are available for those that work for themselves when it comes to home loans. But the process of getting a mortgage when you’re self-employed can be a bit more complicated than if you have a paycheque coming from the Big Boss every two weeks; and being armed with all the documentation you’ll need will help you get your mortgage that much quicker.
The most important documentation that you’ll need is proof of your income, unless going with a stated income mortgage, in which case you’ll need to fill out the appropriate paperwork to state your income. Generally though, self-employed individuals need: a Notice of Assessment for the past 2 years; financial statements for the past 2 years if the business is incorporated; your business license; two pieces of photo ID; proof of down payment in the way of a gift letter or 3 months of business account statements; and a void cheque.
But in addition to proving your income, you’ll also need a copy of your credit report, whether you’re applying for a stated income or verified income mortgage. An Ottawa mortgage broker can apply for a copy of your report on your behalf, and even submit them to various lenders that are likely to give you a mortgage. While using an Ottawa mortgage broker, you’ll also need to fill out a PIPEDA (Personal Information Protection and Electronic Documents Act,) which will allow them to send, receive and exchange documents and information on your behalf.
Along with information regarding your own income and credit, you’ll also need the standard information on the property you want to get a mortgage on; at least what the price is that you’re going to need to borrow. Most Ottawa mortgage brokers and lenders also require certain types of insurance to be purchased on the property before they’ll close the mortgage (many of these costs were covered in last month’s miniseries on the different kinds of closing costs.)
Even when applying for a stated income mortgage, there can still be quite a bit of documentation required when getting any mortgage, let alone one for the self-employed. The last thing you want is to find your perfect property, only to lose it due to the time it takes you to get your documentation together. Know what you need beforehand, get that mortgage much quicker (and with a much smoother process,) and soon, you will be moving into your new office – and your new dream home!