In Canada, it’s estimated that roughly 10 percent of the Canadian population is self-employed. Since the financial crisis, this number has risen due to the digital age of entrepreneurship we live in today.
With more and more people are becoming self-employed by starting online businesses, which will lead to continuous growth. Although self-employment is great for our economy it comes with one downfall for the self-employed person, it’s harder to qualify for a mortgage.
Without regular pay cheques and proof of the same, you might hit a brick wall when it comes to applying for a mortgage. Even for self-employed individuals who make thousands of dollars each month, qualifying for a mortgage has still proven to be quite difficult.
Government Guideline B-20: An Overview
In 2012, the government’s Guideline B-20 came into effect. This rule requires banks that are federally regulated to look closer at homebuyers prior to approving their mortgage. For banks, bi-weekly cheques are what determine whether or not they approve your mortgage. Prior to this rule, it was a lot easier to secure a mortgage.
How Mortgage Brokers are Helping Potential Homebuyers’
Due to these new guidelines, mortgage brokers like those at AKAL Mortgages have stepped in to help connect the Canadian self-employed and unincorporated business owners with the financing they require. We’ve worked with a number of self-employed professionals who couldn’t find a suitable lender on their own.
The New Mortgage Rules
Since Ottawa announce the new mortgage rules, many homebuyers have become discouraged and they have felt the impact by a number of bank turn downs.
While the broker industry thrives, nationwide the housing market takes a dive with home sales dropping by 5.3 percent in the month of November.
Now buyers are looking for lending alternatives and since only brokers can connect buyers, they will be the one’s solely responsible for the health of the Canadian economy. Although there is still uncertainty when it comes to the future.
For more information about self-employed mortgages, we strongly encourage you to speak to a broker today by calling 416.621.1300.
When we say Yes! We stand behind our promise.