The guidelines vary for the salaried employee vs the self-employed. While a salary and an employment letter work well for securing a mortgage, the requirements for those that are self-employed are just a bit more elaborate.
When applying for a mortgage, there are different guidelines when you’re an employee vs. self-employed with your own business. As your trusted mortgage advisor, I have compiled these guidelines and requirements and turned them into an easy to digest checklist.
Employed
Assuming your credit score is above 680 and you have a minimum of 3 months of solid work history from your current employer. In addition to showing proper identification, here are the income verification documents you’ll be needing to provide when applying for a mortgage:
- 2-3 of the most recent paystubs
- A Letter of employment which is on an official letterhead. This should state the length of employment, salary/wage, commissions/bonuses and current position
- Most Recent T1 General Income Form
- Notice of Assessment
Keep in mind, some lenders may ask for additional documents, but this is a general list of what is needed.
Self Employed
For self-employed applicants include individuals that have an ownership of over 25% in a company. Applicants that are also considered as self-employed include those who are paid on a fully commission basis, truckers and taxi drivers, those based on piece work pay and those who are employed by an immediate member of their family.
If you’re self-employed, lenders require the following:
- Tax returns from the previous 3 years
- Balance Sheet, and a signed year-to-date profit and loss statement
- A Credit Report of the Business
- Articles of Incorporation
- Financial Statements of the business
As just like the employed section, some lenders may ask for additional documents, but this is a general list of what is needed.
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