Q: My bank declined my mortgage because my personal tax returns show a low net income, but my business is highly profitable. Can you help?

A: Yes, absolutely! This is the most common hurdle for business owners. Traditional banks rely heavily on your personal Notice of Assessment (NOA) and punish you for writing off expenses to save on taxes. As a mortgage broker specializing in self-employed clients, I work with alternative lenders who look past your personal tax returns and focus on the strength of your business bank statements, corporate financials, and cash flow to get you approved.

Q: What is a "stated income" mortgage, and does it apply to me?

A: A stated income (or alternative) mortgage is designed specifically for self-employed individuals whose "on-paper" income does not reflect their actual purchasing power. Instead of proving your income purely through T1 Generals and NOAs, these specialized lenders allow us to use a reasonable estimate of your true income based on your industry, gross revenue, and business bank statements.

Q: What documents will I actually need to provide if we aren't just using my personal tax returns?

A: While we may still review your NOAs, we will rely more heavily on your business documentation. You will typically need to provide your Articles of Incorporation or Master Business Licence, 6 to 12 months of business bank statements showing consistent revenue, financial statements prepared by your accountant, and proof that your HST/GST is paid up to date.

Q: Do I need a massive down payment to buy a house if I am self-employed?

A: Not necessarily. If you have strong credit and your provable income is sufficient, you can still purchase a home with as little as 5% down using default insurance. However, if we need to use a stated income program because your personal income on paper is heavily minimized, you will typically need a minimum down payment of 10% to 20%, depending on the lender and the property type.

Q: Will my interest rate be much higher because my personal income is low on paper?

A: If we place you with an Alternative (B-Lender) because of low reported income, the rate may be slightly higher than a prime bank rate, and there is usually a 1% lender fee. However, the trade-off is that you actually get approved for the home you want! Our strategy is usually to use this as a short-term stepping stone (1 to 2 years) while you adjust your tax strategy, after which we can refinance you back to a prime lender at the lowest rates.

Q: Can we "add back" some of my business deductions to increase my qualifying income?

A: Yes! If we are working with certain prime lenders, we can often "gross up" your income by adding back specific non-cash deductions you claimed on your taxes—such as Capital Cost Allowance (depreciation), business-use-of-home expenses, or vehicle allowances. This is a great strategy to bump up your qualifying income without having to move to an alternative lender.

Q: I've only been running my business for a year. Do I have to wait two full years to get a mortgage?

A: Traditional banks almost always require a strict two-year history of self-employment. However, if you have strong business financials right out of the gate, or if you transitioned from an employee to a contractor in the exact same industry, I have access to lenders who can approve you with less than a two-year track record.

Q: Can I use money straight from my corporate bank account for my down payment?

A: Yes, but it requires careful planning. If you withdraw the funds as a dividend or salary, it becomes taxable personal income. We can work together with your accountant to figure out the most tax-efficient way to move those funds for your down payment, or I can match you with lenders who are flexible with how down payment funds are sourced from a corporation.

Q: I owe the CRA some money for last year's taxes. Will this block me from getting a mortgage?

A: For traditional "A" lenders, yes—they will require all taxes to be paid in full before advancing a mortgage. However, I have access to specialized lenders who will either overlook the CRA debt (if it's being paid off through the mortgage proceeds in a refinance) or allow it if your overall business health and equity are strong. Always be upfront with me about tax arrears so we can structure the application properly!

Q: Does it make a difference to the lender if I am a Sole Proprietor versus Incorporated?

A: It changes how we present your application. If you are incorporated, your business is a separate legal entity, meaning we can leverage corporate financial statements and retained earnings. If you are a sole proprietor, your personal and business finances are legally combined, so lenders look closer at your Statement of Business Activities (T2125). I know exactly how to package both types of applications to highlight your true financial strength.