As told by Brieanne Doucet, Mortgage Broker at Innovative Mortgage Solutions.
A recent client of mine was referred to me by his builder. At the time, he was renting the home that he was eventually supposed to buy from the builder, however he was having trouble obtaining an approval from any of the standard lenders (we call these A Lenders in the mortgage industry). This client was self-employed and, in order to save him money on his personal income tax, his Accountant had written off a lot of his income. These A Lenders would not consider this income on his mortgage application because it had been written off through his taxes, which meant the income they would accept was not a true reflection of what he was earning.
After discussing his file with a few alternate lenders (B Lenders), I was able to get him approved for a mortgage. The Lender who gave us an approval was able to qualify my client at an income level that was more in line with what my client was actually earning from his business.
This enabled him to become a home owner, but the catch was that B Lenders offer rates slightly higher than the rates that A lenders are able to extend.
What I was able to do was secure him an approval with a B Lender at an increased rate for a one year term. I reached out to his Accountant and together we came up with a mortgage plan so that after the year was up and it was time for our client to renew his mortgage, he would be able to obtain an approval from an A Lender at a lower interest rate. When the year was up, I was able to secure him a lower five-year fixed rate which decreased his mortgage payments by an amount that was not only cheaper than his current mortgage payments, but also cheaper than he was paying for his rent in the very beginning.
If you are a self-employed individual, there are many options we can discuss to obtain that goal of home ownership. Feel free to email me at [email protected] or call our office at (780) 416-1085 for your complimentary mortgage consultation.