Finances and self-employment are often a tricky thing. For many sole proprietor business owners or
freelancers, it’s not as easy to walk into a financial institution and obtain credit, a loan, or a mortgage.
With mortgage interest rates so low right now, we’re seeing many refinancing or purchasing property,
so it’s timely to talk about how to best position yourself as a self-employed individual for a mortgage or
refinance. To provide you with the best information possible, I looked to my own network of
professionals and asked them for their top tips to share.
As a financial planner, and a self-employed individual, I know how important it is to plan in advance if
you’re looking to apply for an increase in credit in any capacity, and a mortgage will surely be your
largest loan you obtain in your lifetime.
Rebecca Warkentin, Mobile Mortgage Specialist with TD Canada Trust agrees. "Obtaining a mortgage is
large financial investment — and it requires a lender to look at your entire financial picture. One
important factor is steady income. This can pose a challenge for self-employed individuals. However,
financing a home when you’re self-employed is attainable, especially with preparation.”

So what type of preparation you ask?
As we are deep in tax time, your focus may be to obtain as many tax deductions as possible. Rebecca
cautions self-employed individuals, “Being self-employed also means you are privy to many tax
deductions and write-offs. However, although this can help you avoid paying taxes, this can hurt you
when trying to get a mortgage. If you are planning to purchase a home, it is important to keep this in
mind during tax season.”
Definitely talk to your tax professional in advance, and see if any tax deductions can be carried forward
to be used in a future year, and how to best position your tax return for review by a lender.

The 5 C’s of successful mortgage approval
I also chatted with Edith Bedard, Mortgage Broker with Mortgage Alliance who, as a mortgage broker,
can shop your file to multiple lenders. Edith uses the 5 C’s with her clients as a reminder for what to
keep in mind when preparing for an application: Credit, Capacity, Capital, Character, and Collateral.
You also have to take into consideration your business model, and if you’re accepting cash payment “off
the books” for certain products or services your business provides.
Edith says specifically to look at your business setup as part of your preparation. “Ask yourself:
1) If you’re getting paid cash, are you declaring that money and depositing it into your bank
2) Do you invoice your clients?
3) Are you using a business bank account, or your personal bank account for business transactions?

All of these details will affect how the lender will see and analyse your file. Some of these details may be
overlooked or may hinder your financial capacity. “

Plan ahead, save time, increase your ability to be approved
If you’re not already setting yourself up for success, it’s a good time to start planning to do so for the
future. Positioning yourself financially to look good to a lender can only help in your overall business
operations. Keeping yourself organized all the time, can help save time when you’re ready to apply.
Rebecca Warkentin suggests, “Lenders will typically want to see at least two years of steady income
documentation. This can include bank statements, income taxes and Notice of Assessments, and
financial statements. Ensuring you have all this documentation up-front can help streamline the process
when going to obtain a mortgage. Ask your lender beforehand to ensure you have everything you need
based on their policies.”
Steps for success:
 Have separate business banking, and keep all business income and expenses in that account.
Pay yourself from there to your personal account to cover your personal expenses (for sole-
 Track all the revenue you’re earning (cash and other) so that you’re showing your true income
and capacity to pay the mortgage payment
 Discuss with your tax preparer to enhance your taxable income the year(s) prior to your
application if possible, and be prepared to pay more income tax than usual
 Stay organized with your business and personal finances – know where your documents are, and
what your numbers look like in advance (and be prepared to show 2 years back)

Working with a professional who knows how to position a self-employed individual in the best light is

Get in touch with Rebecca Warkentin or Edith Bedard to talk about your mortgage approval.



About my contributors:
Rebecca Warkentin
Mobile Mortgage Specialist, TD Canada Trust
IG @rebeccawarkentin_mortgages
Rebecca is your key to home ownership. Serving the Hamilton and Niagara Regions, as a mobile
mortgage specialist Rebecca is available outside of normal banking hours to suit your schedule, and is
operating electronically to ensure your health and safety.
Contact Rebecca:

Edith Bedard
Mortgage Agent, Mortgage Alliance
FB @edith-bedard-mortgage-agent
Edith serves the Niagara Region working with individual homebuyers and real estate investors to secure
the best financing option. As a mortgage agent, Edith will prepare your file and shop it to her 60+
lenders, including banks, credit unions, and alternative lenders, and is able to bring in private or
commercial lenders if your situation requires.
Contact Edith:

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