Options for all different income types
What is a stated income mortgage?
A stated income mortgage, or a self employed mortgage, allows self employed borrowers to make a declaration of their income instead of providing their claimed taxable earnings. Stated income loans are provided by a few different mortgage lenders in the industry and each lender has a significant difference on what they will consider in terms of stated income. A limited number of banks, some B-lenders, and all private mortgage lenders have stated income mortgage options based on different criteria and with different interest rates.
There are a handful of traditional banks that offer bank statement loan programs (also referred to as alternative income verification loans) at lower loan to values if you owe no income taxes. More options if you have significant assets or savings which can demonstrate your ability to repay. B-Lenders do have some self employed mortgage options too, but like in the case of banks, you must be up to date with your tax returns. There is a high level of documentation still required.
Private mortgage lenders in BC all have stated income or no income mortgage products. They are the simplest lender for borrowers to be approved through.
Stated Income Loans For Self Employed Or On Contract
For the self-employed, a stated income mortgage tends to be the best type of loan available. These home loan products have changed dramatically in the past few years. Some lenders require a gross up alternative documentation of claimed income, while others allow us to just state your earnings within reason, to your trades average income. There are also products that rely mostly on the real estate’s equity and don’t look at the borrower’s income documentation.
How Much Equity Do I Need?
If you are self-employed, the amount of home equity required for a stated income loan varies depending on what product you are applying for. With banks, most of the stated income products max out at 55% or $800,000 and are location based.
Some B-Lenders will go up to 65% of the property’s appraised value or a max mortgage amount. This is dependent on the housing market and applies to major centres only. You must check in with us for the latest requirements.
Some of our private lenders will allow stated income up to 75% loan to value. This is dependent on several factors including major centres and population bases.