Stated Income Program for Self-Employed Borrowers
November 3, 2024 | Posted by: Alex Vinarski
Unlocking Mortgage Opportunities with the Stated Income Program for Self-Employed Borrowers
The Stated Income program is a specialized mortgage solution designed to assist self-employed individuals in securing a mortgage without the need to provide income documentation from tax returns. Instead of traditional income verification, borrowers simply state their income and provide 6-12 months of bank statements showing deposits from their business, along with business registration documents. A minimum down payment of 20% is required.
Who Can Benefit from the Stated Income Program?
This program is ideal for self-employed individuals looking to purchase or refinance a property, including rental properties. It’s also a great option for those who receive commission income, tips, or even cash income. For clients who are unable to provide bank statements, a private mortgage option is available, requiring no income verification.
Key Features of the Stated Income Program:
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Minimal Documentation:
- The Stated Income program simplifies the mortgage application process by requiring only bank statements and business registration, making it accessible for many self-employed borrowers.
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Competitive Interest Rates:
- Borrowers can enjoy interest rates that are very close to regular bank rates, making this program a cost-effective alternative to traditional mortgages.
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Flexible Business History Requirements:
- Unlike regular self-employed mortgage programs that require at least two years of business history, the Stated Income program does not have this restriction, making it easier for newer business owners to qualify.
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No CMHC Insurance Fee:
- With a 20% down payment, borrowers avoid the CMHC insurance fee, which would typically be 3.3%. Instead, there is a one-time fee of 1%.
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Flexible Down Payment Options:
- The down payment can be gifted, and the program even allows for partially gifted down payments on rental properties.
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Bad Credit? No Problem:
- Even borrowers with bad credit can qualify for a mortgage under the Stated Income program, broadening the range of clients who can benefit from this option.
Additional Benefits:
- Home Equity Visa:
Under the Stated Income program, clients can secure a Home Equity Visa as a first or second mortgage, with loan amounts up to 80% of the property value. This product is very similar to HELOC.
Conclusion
The Stated Income program is a valuable tool for self-employed borrowers, offering flexibility, minimal documentation, and competitive rates. Whether you’re purchasing a new home, refinancing, or investing in rental properties, this program provides a practical solution tailored to the unique financial circumstances of self-employed individuals.
If you’re in Vancouver, BC, and are self-employed or have non-traditional income, contact Alex Vinarski, Mortgage Broker Vancouver, to learn more about how the Stated Income program can help you achieve your homeownership goals.
