One of the Ottawa Real Estate Questions I seldom get asked is "what is new in the banks Borrowing standards?"
Well.........New rules for self-employed borrowers are effective today Friday, April 9th, 2010 for all mortgages insured by by Canada Mortgage and Housing Corporation (CMHC) and pose new challenges for this category of clients.
- Purchases are only available up to 90% (previously 95%)
- Refinances are only available up to 85% (previously 90%)
- Commissioned sales borrowers are no longer eligible under this program
- A minimum of 2 years consecutive self-employment will no longer be required
- Borrowers must have a minimum of 2 years work experience in the same field
Now, self-employed and commissioned-income borrowers with more than three years in the same business applying for a mortgage, are required to provide traditional proof of income (or "third party validation") through documents like financial statements, T1 Generals, Notice of Assessments and T4s etc.
PLEASE NOTE: Genworth Financial Canada's (GNW) policies remain unchanged and self-employed applicants who have been in business for 2 years or longer continue to be eligible BUSINESS FOR SELF (ALT. A) program that means more Choice & Convenience for potential clients.
Its not all gloom and doom, there is still a good chance of getting qualified if you are self employed.
Let me put you in touch with one of my Mortgage Specialists to help you through this minefiled.
For any more information please contact http://OttawaRealEstateQuestions.com
Comments(2)