Mortgage Programs for Different Incomes, Backgrounds and Plans
This isn’t a complete list, and the rules vary by lender and change over time. Here’s some of what’s available.
How you earn
How you get paid changes how lenders assess it. In each case, lenders look at how long you’ve had the income and how consistent it is.
Full time (salary or hourly)
This is usually the most straightforward income to document.
Part time
Part time income can count toward qualifying. Lenders look at how long you’ve had it and how consistent it is.
Commission
Commission income is often averaged over time, so your history matters.
Gig work
Gig work is often assessed over a longer history, and lenders differ in how they treat it.
Dividends and bonuses
Dividends and bonuses can count toward qualifying when they’re documented and consistent.
Self-employed
There are several documentation paths for self-employed income, not just two years of tax returns. Depending on the lender, that can include business bank statements, and in some cases less than two years in business if you worked in the same field beforehand.
Who you are
Frontline workers
Some lenders offer a rate discount and cashback to frontline workers such as teachers, police, firefighters, paramedics and nurses. These are usually for owner-occupied purchases, and there are additional criteria, so the details matter.
Medical professionals
Some lenders let residents, fellows and new doctors, dentists and vets qualify on projected future income instead of current income. These are usually insured, owner-occupied purchases, and how recently you finished your program varies by lender.
New to Canada
There are programs built for newcomers with limited Canadian credit. The requirements vary by lender.
Net worth programs
With some banks’ net worth programs, your documented investments count toward qualifying, and they can stay invested. If your income doesn’t quite qualify for the home you want, but you have an inheritance or other investments you’re thinking about cashing in, you may not need to.
You still need income and, on a purchase, a down payment. The assets support the qualification, but they don’t replace either. Some programs limit how much one can borrow against the home, and the minimum assets required and how long the funds need to have been held beforehand differ by lender. These programs can be used for a purchase or a refinance.
Your plans
Renovating at purchase
Purchase plus improvements lets you fold the cost of a renovation into the mortgage, so the work is financed with the purchase instead of separately afterward.
Buying before you sell
Bridge financing covers the gap between closings when you need to close on a new home before the sale of your current one closes.
Buying a rental
Investment properties have different rules than a home you’ll live in, including a larger minimum down payment. Owner-occupied properties with two to four units are treated differently again, and how lenders count suite income toward qualifying varies.
Moving later
A portable mortgage can move with you to your next home, which can help you avoid a penalty if you sell before the term ends. Portability rules vary by lender.
Reverse mortgage
A reverse mortgage lets older homeowners access their home equity without regular mortgage payments. The interest adds to the balance over time, and the balance is typically repaid when the home is sold or the homeowner moves out, so it’s a different kind of decision from the others here.
Which one applies to you
Programs and eligibility vary by lender, and they change. Connect with me at 249-480-1249 and I’ll tell you which ones apply to your situation.
This is one of the 10 things I cover in my monthly live session, Before You Buy: 10 Things Every Homebuyer Needs to Know. Save your spot here.
Call or text 249-480-1249.
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HumberBayMortgages.ca
Simon Browning | Mortgage Agent Level 2 | BRX Mortgage 13463
This content is for informational purposes only and does not constitute financial advice. Programs, rates and lender policies change frequently. Always consult a licensed mortgage professional before making decisions about your mortgage.
