01. A real income picture
Banks look at your net T1 line and shrug. I look at your gross revenue, business deposits, retained earnings, and pull a picture that reflects what you actually make.
You built the business. Let's get the mortgage.
Big banks underwrite to your T1 net income - the number your accountant works hard to minimize. I underwrite to who you actually are: revenue, deposits, retained earnings, and 2+ years of running a real operation. There's a lender for that.
Most bank reps look at your T1 line and stop reading. We start there and then keep going.
Banks look at your net T1 line and shrug. I look at your gross revenue, business deposits, retained earnings, and pull a picture that reflects what you actually make.
Specialty programs that qualify you on a reasonable, documentable income rather than the lowest number on your tax return.
Lenders who specialize in self-employed files. Slightly higher rate, dramatically more flexible underwriting.
If you're incorporated, I'll show you how to combine personal salary, dividends, and retained corporate earnings into a qualifying income.
T1 Generals, NOAs, business financials, bank statements - I tell you exactly what we need on day one.
Sometimes the right answer is to optimize your books for 12 months and apply next spring. I'll tell you when that's the move.
Not every lender plays in self-employed. The ones that do, do it well - I know who they are and how they price.
10% min down
Sagen and Canada Guaranty offer programs where qualifying income can be 'stated' - based on business type, time in business, and bank deposits.
15% gross-up common
Lenders will often gross up your stated net income by 15%. Add-backs (CCA, business-use-of-home) can also be added back.
Personal + retained earnings
Lenders will look at your shareholder loans, retained earnings, and corporate cash flow - not just your T4.
Rates ~1-2% higher
Specialized lenders with flexible underwriting for self-employed files that don't fit A-lender boxes.
Bridge or rebuild
When alt-A still doesn't work, private money is a 6-24 month bridge to rebuild credit or normalize income.
12-24 months deposits
A handful of lenders will qualify based on business bank deposits instead of tax returns.
“Self-employed clients are some of the strongest borrowers I work with - they just need someone willing to do the underwriting math instead of reading two lines off a tax return.”- Jeremy LaHaie
Self-employed mortgages are where a broker actually earns their keep. Self-employed files require a lender who understands business income, a broker who can package the story, and patience.
Most self-employed people I work with are excellent borrowers with real cash flow. The problem is that their tax return is engineered to minimize tax, which makes them look poorer than they are on paper.
My job is to translate. I package your real financial picture into a story a lender can underwrite - sometimes an A-lender stated-income program, sometimes alt-A with a plan to refinance in 24 months.
Whatever the path, we map it out from day one - including how to get to the cheapest mortgage possible within 1-3 years.
Banks underwrite to T1 net income, which self-employed people legally minimize for tax reasons. I see the real picture and match you with lenders who do the same.
Two years of T1 Generals, two years of NOAs, business financials if incorporated, 6-12 months of bank statements, and a summary of your business.
If you fit an A-lender stated-income program, no. Alt-A runs 0.75-1.50% above A-lender rates. The right answer is often alt-A now, refinance into A-lending in 1-3 years.
Yes, it's harder but possible with a strong industry history. We'd lean alt-A for the first mortgage in that case.
Most lenders cap GDS at ~39% of qualifying income - often net T1 + 15% gross-up + add-backs. Send me your NOA and I'll model an exact number.
I underwrite to a 24-month average rather than a peak or trough year. As long as the trend is stable or up, lenders generally accept the average.
Questions answered by Jeremy LaHaie, mortgage professional with INVIS Inc., serving Winnipeg, Ste Anne, Steinbach, and all of Southeast Manitoba. Call or text (204) 995-7336.