Mortgage Blog

Self-employed buyers in Burlington, Oakville, Hamilton, and Milton often have income that is real and a Notice of Assessment that looks small after write-offs. Banks that only read Line 15000 will say no. A self-employed mortgage in Ontario is a documentation file: two years of NOAs, a business type (sole prop vs incorporated), add-backs the insurer will allow, and an OSFI stress-test on the income we can actually use - not the revenue you quote at a barbecue.

I am Jason Woods, Principal Broker at TLC Mortgage Group (Licence 12988). We compare bank, monoliner, and insurer overlays so a write-off year does not automatically kill a purchase in Aldershot or a townhouse in Milton. This is educational. Start at jason-woods.com or call (289) 925-9599.

What lenders actually use as income

For a salaried T4 buyer, the lender uses paystubs and T4s. For self-employed, the starting point is usually the two most recent Notices of Assessment and the matching T1 Generals. Incorporated owners may also need T2s, financial statements, and proof of dividends or salary they actually took. Revenue in the corporate account is not personal qualifying income until it is paid out in a way the insurer recognizes.

If last year you wrote off a truck, a home office, and a family trip as 'business,' expect those add-backs to be argued, not assumed. Some add-backs are standard (capital cost allowance on a vehicle, a portion of home-office). Some are not. We would rather tell you the usable income in week one than watch a commitment collapse after you waive financing.

Sole prop vs incorporated vs partnership

• Sole proprietorship. Often cleaner: T1 plus NOA. GST/HST filings help show the business is real.
• Incorporated. Salary plus dividends plus retained earnings is a story. Lenders differ on whether they average two years of dividends or want a longer history. Bring the minute book questions to us, not to the listing agent.
• Partnership. Percentage of income has to match the partnership agreement. A 50/50 on paper and a 90/10 in the bank account is a delay.

The stress test is on usable income

OSFI's stress-test qualifies you at a higher rate than your contract rate (the greater of a buffer above contract or a floor set by the guideline in force). Self-employed files fail here when the broker used 'true cash flow' the insurer will not accept. We run GDS/TDS on the income that will survive underwriting, including the HELOC you already have and the car you finance through the corporation.

Down payment seasoning and gifts

Self-employed down payment often comes from the business. That can look like a corporate withdrawal that needs an accountant letter. Gift funds from family still need a gift letter and a paper trail. Large cash deposits without a story stall files in Halton just like they do in Toronto. Tell us where the down payment has been sitting for 90 days.

Neighborhood notes

• Burlington / Aldershot. Mix of contractors and consultants buying resale. Appraisals on older houses still care about condition.
• Oakville. Higher prices. Usable income has to stretch further. A 'good year' plus a thin year gets averaged - bring both NOAs, not the pretty one.
• Hamilton. More first-time self-employed. Insured files have down-payment and price-cap rules. We check before you write.
• Milton. Newer freeholds, tighter timelines. Self-employed conditions cannot be a three-day close.

What to bring to the first call

• Two years of NOAs and T1s (and T2s if incorporated).
• Year-to-date business statements if you have them.
• List of add-backs your accountant already discusses.
• Down-payment source and 90-day history.
• Target city and price, plus whether this is purchase or refinance.

We will tell you the same week whether a bank insured file, an uninsured conventional, or a different documentation path is the honest fit. If you are writing offers this weekend, send the MLS number and the two NOAs. A usable-income miss is cheaper to find before a deposit moves than after a Hamilton seller has taken the house off the market.

How TLC Mortgage Group sequences self-employed files

1. Read the NOAs and business type. Estimate usable income, not hoped income.
2. Stress-test GDS/TDS including existing HELOCs and leased vehicles.
3. Compare lender overlays (bank vs monoliner) on the same story.
4. Only then talk offer strategy and realtor timelines.

Start at jason-woods.com. Subject line 'self-employed' plus Burlington, Oakville, Hamilton, or Milton.

Credit, CRA, and why the file stalls

A collections item, a late GST/HST filing, or a CRA arrears arrangement can stall a self-employed mortgage even when the NOAs look fine. Bring the CRA account print if you have a payment plan. We would rather redesign the file in week one than discover a requirement letter two days before closing in Milton. Bankruptcies and consumer proposals have waiting periods that differ by insurer. Say the date, not 'it was a while ago.'

If you pay yourself irregularly so the personal account looks thin, say that. Lenders still want to see that personal obligations (rent, support, existing HELOC) have been paid. A strong corporate account and a bounced personal hydro bill is a story we need on day one.

Accountant partners

If you are the accountant, the fastest help is a one-page add-back summary that matches the T1. We will not invent CCA add-backs that CRA treatment will not support. Alignment up front keeps the commitment letter from bouncing. If the T1 and the add-back sheet disagree, we stop and fix that before we talk to a lender.

Frequently asked questions

Do I need two years of self-employed history?

Most insured and bank files want two years. Some alternative lenders will look at one year at a price. Say how long you have been at it on day one.

Can I use last year's strong revenue if this year is slower?

Lenders usually average or use the lower year. We will not pretend a trailing-twelve that is not on a NOA.

Does GST collected count as income?

GST collected is not personal income. We use net figures the insurer recognizes.

What if I just incorporated?

Then we may still underwrite on the sole-prop history plus the new company. Bring both stories.

How do I start?

Go to jason-woods.com or call (289) 925-9599. Attach two NOAs and the city you want to buy in.

Jason Woods - Principal Broker - TLC Mortgage Group - Burlington, ON - Lic. 12988

Educational information for Ontario borrowers. Not a commitment to lend. Jason Woods, Principal Broker, TLC Mortgage Group, Licence 12988. Verify licensing with FSRA. Stress-test and insurer rules change.