What Self-Employed Homebuyers Need to Know About Getting a Mortgage in Canada

Being your own boss comes with plenty of perks—flexibility, control, and the chance to build your own success story. But when it comes to getting a mortgage in Canada, self-employed homebuyers often face a few more hurdles than traditional salaried employees. The good news? With the right guidance and preparation, homeownership is well within reach for self-employed Canadians.

At Hoam Loans, we specialize in helping self-employed individuals navigate the mortgage process with confidence. Here’s what you need to know if you’re self-employed and planning to buy a home.

Why Getting a Mortgage is Different for Self-Employed Buyers

When you work for an employer, your income is usually consistent and easy to verify with pay stubs and T4s. Self-employed borrowers, on the other hand, may have:

Irregular or seasonal income
Tax deductions that reduce their reported net income
Multiple income sources
Complex financial structures

Because of these factors, traditional lenders often view self-employed applicants as higher risk, even if you’re earning well. They typically require more documentation and may scrutinize your income more carefully.

Common Challenges for Self-Employed Homebuyers

Proving Stable Income: Lenders want to see at least two years of consistent, self-employed income.
Lower Reported Income: Many self-employed individuals reduce their taxable income through deductions, which can make them appear less qualified on paper.
Higher Down Payment Requirements: In some cases, alternative lenders may require larger down payments from self-employed borrowers.
More Documentation: Be prepared to provide tax returns, Notice of Assessments, bank statements, and potentially business financials.

How Self-Employed Homebuyers Can Prepare for a Mortgage

1. Organize Your Documents Early

Lenders typically ask for:

Two years of personal and business tax returns
Notices of Assessment from the CRA
Business financial statements (if applicable)
Six to twelve months of personal and business bank statements
Proof of business ownership (e.g. business license or articles of incorporation)

2. Manage Your Credit

A strong credit score (ideally 680+) can offset the perceived risk of self-employment. Pay down debts, keep credit utilization low, and avoid missing payments.

3. Consider Increasing Your Down Payment

A larger down payment can improve your approval chances and may help you secure better rates, especially with alternative lenders.

4. Work with a Mortgage Broker Who Specializes in Self-Employed Mortgages

Not all lenders have flexible programs for self-employed buyers, but at Hoam Loans, we work with lenders who understand self-employment and offer alternative solutions like:

Stated income mortgages
Bank statement programs
Flexible debt service ratio policies

Can You Get a Mortgage if You’ve Been Self-Employed for Less Than Two Years?

Yes, it’s possible—especially if you recently transitioned from employment in the same industry or have strong cash flow and credit. Some lenders may consider you with one year of self-employed history, though more documentation or a larger down payment may be required.

Should You Choose a Traditional Lender or an Alternative Lender?

Traditional Lenders (Banks, Credit Unions): Lower rates, but stricter qualifying rules.
Alternative Lenders (Monoline, Private, B-Lenders): More flexible for self-employed income, but may have slightly higher rates or fees.

At Hoam Loans, we’ll help you find the right lender for your situation—balancing flexibility, affordability, and your long-term goals.

Final Thoughts: Homeownership Is Within Reach

Being self-employed shouldn’t keep you from buying your dream home. With the right preparation and a mortgage broker who understands your unique situation, you can successfully navigate the process and secure financing that works for you.

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Ready to explore your self-employed mortgage options? Contact Hoam Loans today—let’s make homeownership happen, on your terms.

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