Amongst those that added remote work to their career trajectory during the pandemic, were those who decided to dip their toes into the world of business-for-self. Whether leaving a company to start your own, or diving into starting a business you had always dreamed of, working for yourself has become a rising career choice for many.
While we applaud those who have decided to go after their career goals, we have also had many extensive discussions with clients who are finding it difficult to obtain a mortgage with their career.
In other words, they get rejected before they even have the chance to house shop.
Obtaining a mortgage loan in Canada without a traditional source of income can be difficult, as lenders generally prefer proof of income to determine your ability to repay the loan.
But, it’s not impossible! If you are an individual who has an untraditional source of income, such as self-employment, here are a few ways you can obtain a mortgage loan (without the hassle!).
1. Dive into other sources of income
While you may not have traditional employment with a consistent paycheck, you may have alternative sources of revenue to explore. This could include freelance work, rental income, investments, or revenue from self-employment. These all count towards your proof of income!
If you find that you have sufficient income across all streams of alternative income, gather every documentation you have to support your income statement and present it to your lender.
The more documentation, the better!
2. Co-Signer or Guarantor
If you find that your current income is not sufficient enough to cover the loan you are looking for, consider a co-signer or guarantor. A co-signer is another individual that would sign your application for your mortgage with you, and would make them responsible for any loan repayment should you fail to meet the requirements of your payments.
Essentially their income will be considered for determining your eligibility.
While a co-signer is a great way to obtain a loan if your lender is not able to provide you with a loan based on your non-traditional stream of income, it is certainly a big decision to make.
Make sure you are choosing the right person, and that all bases are covered!
3. Improve your credit
If your income sources are not sufficient enough on their own, your lender may take a look at your credit history to ensure that you have the ability to repay your loan based on previous credit.
A positive credit history can help you to demonstrate to your lender that you are financially responsible, which can be seen as a benefit when it comes to securing a loan with non-traditional ways of income.
4. Work with a private lender
Individuals or businesses that provide loans outside of the standard banking system are known as private lenders. Private lenders are a great alternative when it comes to flexibility (and understanding your needs!), as we take into account other various factors that stretch beyond income.
We understand that as the world is evolving, careers are too! And as non-traditional sources of income and careers are becoming more popular, obtaining a mortgage should not stop you from reaching your goals.
Together, we will come up with a plan to help you find the mortgage plan that best suits you and your needs.
Lean on Arise Mortgage
While some lenders will prompt you with additional challenges when it comes to obtaining a mortgage with non-traditional sources of income, such as higher interest rates, stricter terms, or a larger down payment, at Arise Mortgage, we always strive to find you the best rate, regardless of your streams of income.
Get in touch with our team today to see what we can do for you.