Hi, everybody. Aleem here from the Mortgage Center.

Today I would like to address the questions surrounding what the banks are looking for when it comes to obtaining a mortgage if you are self-employed.

The banks usually ask to see your noti

ce of assessment to confirm that you are first filing your income taxes, and that you are not in arrears. Of course, they also want to see how much income you are claiming to the government.

But what if you have been a cabinet maker/installer for the last dozen years and have finally decided to go out on your own. Most people in these types of situations branch out on their own and find themselves making a lot more money, but they may be only self-employed now for a year.

Well here’s the thing. Typically the bank wants to see that you’ve got at least a two-year track record of income if you are self-employed. But if you were employed back then and now you’re self-employed, how do they make the connection?

Now here’s the good news, some lenders are more understanding and empathic to you if you are in this type of situation and are more open to the idea of looking at your historical earnings. As long as you transitioned into self-employment in the same industry doing the same thing these lenders will take this into account when looking at your income. They will typically look at an average of your years as a salaried employee and include that along with your business for self start-up year income.

This is particularly important for a guy who’s been self-employed for only one year but has been in the same line of work for a number of years. Often times they move to self-employment because they recognized the opportunity to make a lot more money as their own boss rather than just collecting a pay cheque and working for someone else.

If you or anyone that you know are facing this similar circumstance, where you have been told something like, “You haven’t been in business long enough for us to count your income,” but have been doing the same job for a very long time, have them contact me and I will help them. It’s Aleem from the Mortgage Center

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