Can I get a mortgage if I’m self-employed?
Can I get a mortgage if I’m self-employed? Yes — and here’s the exact plan that gets approved in Georgetown, Ontario.
Quick promise
You’re self-employed. Banks tell you it’s harder. Lenders ask for weird documents. You feel stuck. That stops today. This guide gives a clear, step-by-step plan to get mortgage approval in Georgetown, ON — using strategies proven in this local market.
Why self-employed buyers get blocked (and the simple fix)
Lenders want predictable income. Self-employed income looks unpredictable on paper. That’s the problem. The solution is predictable evidence. Give the lender a clean, credible income story and you’ll get treated like a salaried borrower.
Do this:
- Prove income with consistent, traceable records.
- Reduce perceived risk by lowering debt and showing savings.
- Pick the right lender for your profile.
That’s it. Execution matters.
What lenders actually look for (Canada rules with Georgetown context)
Lenders evaluate the borrower, the business, and the property. For self-employed borrowers in Georgetown this matters more because the local market draws commuters and investors, and competition can be strong.
Key items lenders review:
- Two years of personal tax returns (T1s) and Notices of Assessment — strongest proof.
- Business financial statements and profit-and-loss if asked.
- Bank statements (3–12 months depending on lender).
- GDS/TDS ratios: Gross Debt Service and Total Debt Service. Typical limits: GDS ~35–39%, TDS ~42–44%. Some alternative lenders accept higher.
- Credit score and credit history.
- Down payment size and source.
In Georgetown, lenders also watch resale value and commute factors. If the property serves as a stable rental or long-term family home, approval is easier. If it’s a tricky condo with short-term-rental history, lenders will tighten requirements.
Mortgage routes for self-employed buyers (what works in practice)
Pick one based on the quality of your documents and the speed you need.
1) Full‑documentation mortgages (best outcome)
- Provide 2 years of tax returns and Notices of Assessment.
- Provide business bank statements and year-to-date profit & loss prepared by an accountant.
- Outcome: Lowest rates, highest loan amounts.
- When to use: You have clean, consistent tax filings.
2) Alternative or low‑doc mortgages (when taxes hide income)
- Use bank-deposit verification, accountant letters, or 12–24 months of business statements.
- Outcome: Higher rates, but faster approvals.
- When to use: You recently started a business or have tax-planning that lowers reported income.
3) Private lending (last resort)
- Use for speed or when traditional lenders decline.
- Outcome: Highest rates, shorter terms, flexible terms on credit issues or lack of paperwork.
- When to use: Need to close quickly, or planning to refinance into a bank mortgage later.
4) Co-signer, larger down payment, or guarantor
- Reduces lender risk and increases approval odds.
- Useful for buyers facing LTV limits.
How to prepare your file — a checklist that wins approvals
Before you book a meeting with a lender or broker, assemble this.
Documentation checklist:
- Two years of personal tax returns and Notices of Assessment.
- Year-to-date profit and loss and balance sheet (signed by you and preferably reviewed by an accountant).
- 3–12 months of business and personal bank statements.
- Corporate tax returns (if incorporated) and T2 schedules.
- HST filings (if applicable).
- Statement explaining any large deposits or one-off income.
- Proof of down payment origin (savings, investments, sale proceeds, gift letter).
- Recent credit report and list of debts.
Checklist actions that improve approval odds:
- Separate business and personal bank accounts now.
- Clean up personal credit: pay down credit cards and old collections.
- Stabilize income for 12 months if possible (even modestly) to show predictability.
- Keep proof of consistent withdrawals for personal income from the business.
Local market insights — Georgetown, ON matters
Georgetown sits in Halton Hills and functions as a commuter hub for Toronto. That creates specific financing dynamics:
- Competition from commuters: Buyers from Toronto can bid aggressively, which raises prices. That increases loan-to-value pressure for first-time self-employed buyers unless they save a larger down payment.
- Commuter-value stability: Properties near transit corridors and highways keep value, which helps lenders consider the collateral more favorably.
- Diverse housing stock: Single-family homes dominate. Lenders prefer stable, well-maintained houses over niche properties.
- Inventory swings: Low listing inventory creates bidding scenarios. If you’re self-employed and need pre-approval, get one early to compete.
What this means: in Georgetown you must be more prepared than a salaried buyer. Lenders will underwrite based on risk. Your job: remove risk.
Pricing, rates, and stress test — what to expect
- Expect traditional lenders to require proof across 2 years for best rates.
- Self-employed buyers often get slightly higher quoted rates if relying on alternative docs.
- The mortgage stress test still applies: qualifying rate is the greater of the contracted rate + 2% or the Bank of Canada qualifying rate. Plan for the higher payment.
- Bigger down payment lowers rates and improves approval odds. If you can put 20% down, you skip CMHC insurance and get better terms.
Negotiation advantage — how to use your position
If you want an edge in a competitive Georgetown sale:
- Show a clean pre-approval with a named lender and limit.
- Offer a reasonable deposit and short conditional periods (inspection, finance timelines you can meet).
- Use a local financing expert who understands lender appetites for self-employed borrowers in Halton.
Mistakes I see self‑employed buyers make (and how to avoid them)
- Filing low tax returns to save tax today and losing mortgage eligibility tomorrow. Fix: plan taxes with long-term financing in mind.
- Waiting to separate accounts. Fix: separate business and personal accounts immediately.
- Picking the wrong broker or lender. Fix: work with someone who knows local underwriters and alternative options.
Action plan — 30‑day sprint to mortgage approval
Day 1–7: Gather documents, order Notice of Assessments, create a clean income summary.
Day 8–14: Meet a mortgage broker specializing in self-employed borrowers. Get a strategy (full doc vs low doc).
Day 15–21: Clean up credit, transfer funds into clear accounts, secure accountant letters where needed.
Day 22–30: Submit application for pre-approval. Get conditional approvals in writing.
If you follow this plan, you’ll move from uncertain to confident in one month.
Why working with a local financing expert matters
Georgetown’s market reacts to Toronto dynamics. Local experts know which lenders approve self-employed borrowers for which property types, and which underwriters can be persuaded with supporting documents. That knowledge saves time and cuts costs.
If you want market-aware, mortgage-ready strategies and a point person who knows Halton Hills lending patterns, call Tony Sousa at 416-477-2620 or email tony@sousasells.ca. He will connect you with the right mortgage professionals and make your file competitive.
FAQ — Self‑Employed Mortgages in Georgetown, ON
Q: Can I get a mortgage with only one year of business income?
A: Yes, but options narrow. Some lenders accept 12–18 months of business history with strong bank statements. Expect higher rates or a shorter-term private loan you refinance later.
Q: Will my incorporation make it harder to get a mortgage?
A: Not if you have proper T4/Dividends or corporate financials and T2 returns. Lenders want to see how you take money out of the corporation (salary vs dividends). An accountant-prepared income reconciliation helps.
Q: How big a down payment do I need?
A: You can qualify with 5% down for primary residence under CMHC rules if you meet income proof and stress test requirements. But in practice, 10–20% down improves approvals and lowers rates, especially if income documentation is thin.
Q: What if my tax returns look low because I claimed business deductions?
A: Prepare a lender-friendly packet: accountant letter, adjusted net income reconciliation, bank-statement proof of deposits. Alternative lenders accept bank-deposit income verification.
Q: How long does pre-approval last?
A: Typically 90–120 days for most lenders. Ask for written terms so you can compete in Georgetown’s fast market.
Q: Are private mortgages common here?
A: They’re used when traditional routes fail or when speed matters. Use them strategically and have an exit plan to refinance to a conventional mortgage.
Q: Should I use a mortgage broker or go straight to a bank?
A: Use a broker who understands self-employed files and local lenders. Brokers match your profile to the lender most likely to approve with the best terms.
Final word — act like a buyer lenders want
Self-employment is not a barrier. It’s a paperwork challenge. Solve the paperwork, reduce the risk, and choose the right lender. Do that, and you’ll get mortgage approval in Georgetown.
Need help building a lender‑ready file and navigating Georgetown listings? Contact Tony Sousa at tony@sousasells.ca or 416-477-2620. He’ll connect you with local mortgage experts and map a clear approval path.
