Small and medium-sized businesses are the engine of the Canadian economy.
As far as mortgage lenders are concerned there are only two types of self employed (or commissioned) individuals - those who are able to prove their income and who consequently qualify for the loan based upon the same debt service ratio calculations applied to an employed person’s income - and those who don’t. And it’s the latter category who often have the most difficulty in obtaining a mortgage.
But don’t despair, there are insured programs available which take into account the nature of this type of income. Up to 90% of the purchase price, or as-improved value, is available determined by a graduated scale tied to your beacon score. The better your credit rating, the higher the amount you may borrow. Slightly higher mortgage default insurance premiums are applied (but capitalized into the mortgage balance) to offset the perceived higher risk.
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