Income Scenarios
Mortgages can seem complicated—particularly for those of us who don’t fit into the traditional “cookie cutter” type approval process. Fears of possible rejection by lenders or inaccurate advice can all lead to fear of the big “M” word.Let’s address a few concerns and hopefully mitigate some of the stress or anxiety you may be facing in purchasing or refinancing a home.
Typical income scenarios
1. Base Salary Plus Tips
Yes, you can get a mortgage if your salary is comprised of a base salary plus tips. An example of this would be restaurant service staff. The assumption here is that the tip amount cannot be proved, but if you fall into this category, we are able to take your base salary and then add a reasonable amount for tips. This combined income amount is then used to qualify you for a mortgage.
2. Self-employed and 100% Commissioned
Yes, you can get a mortgage if you are self-employed or working 100% on commission. This type of scenario is similar to the above. Regardless of what you are claiming on your “Notice of Assessment” to Revenue Canada, we would estimate a reasonable income amount based on your career. It is this “stated” income amount that we use to qualify you for a mortgage and not the income amount reported in the Notice of Assessment.
3. Pension Income
Yes, you can get a mortgage if you are retired and only have pension income. Note: The pension income must be able to service the loan—if not, you should consider a co-signor or a larger down payment. All other requirements, such as credit worthiness of the client and condition of the subject property, are the same.
4. New to Canada
Yes, you can get a mortgage if you are a newcomer to Canada. There is a very flexible mortgage product that’s perfect for those who have recently arrived in our beautiful country and who may not necessarily have a Canadian credit history. In this scenario, you confirm your credit history by providing documentation showing payment of rent, utilities or cable bills.
If you have a question or situation you want to discuss in further detail, contact us.
