self employed

Navigating Self-Employed Mortgages in BC: A Comprehensive Guide

British Columbia has long been a hotbed for innovation and entrepreneurial spirit. For self-employed individuals and small business owners in BC, homeownership is not just a dream but a goal well within reach—thanks to self-employed mortgages. While these mortgages cater specifically to the unique financial circumstances of entrepreneurs, they come with their own set of complexities and nuances that require careful navigation.

At Best Rates Mortgages, we are committed to helping self-employed individuals in BC achieve their homeownership goals through tailored mortgage solutions. This comprehensive guide will delve into the world of self-employed mortgages, outlining the requirements, qualification process, and strategies to enhance your mortgage application. Connect with our experts at Best Rates Mortgages to leverage our in-depth knowledge and experience, ensuring a seamless mortgage journey tailored to your entrepreneurial aspirations and financial needs.

Self-Employed Mortgage Requirements: Laying the Foundation

While self-employed mortgages cater specifically to entrepreneurs and independent professionals, the requirements for securing this type of mortgage can differ from traditional mortgages. Be prepared to provide the following documentation and meet the necessary criteria:

Income Verification

As a self-employed individual, your income may fluctuate more than that of a salaried employee. To assess your financial stability, lenders require income verification through personal and business tax documents, financial statements, or accountant-prepared documents. This information enables lenders to determine your average income over a specified period, usually two years.

Credit Score

Your credit score plays a crucial role in determining your eligibility for a self-employed mortgage. A high credit score indicates responsible financial management, increasing your chances of obtaining favourable mortgage terms and rates. Aim for a credit score of 680 or higher to improve your chances of approval.

Down Payment

Since self-employed mortgages tend to pose a higher risk for lenders, you may be required to provide a larger down payment on your property purchase. A down payment of 20% or more can improve your mortgage application’s chances of success and potentially lead to more favourable loan terms.

Debt Service Ratios

Lenders also evaluate your ability to repay the mortgage by assessing the debt service ratios – Gross Debt Service (GDS) ratio and Total Debt Service (TDS) ratio. Maintaining a GDS ratio of 35% or lower and a TDS ratio of 42% or lower can enhance your mortgage application’s success.

Enhancing Your Self-Employed Mortgage Application: Expert Strategies

Navigating a self-employed mortgage application can be complex, but with these expert strategies, you can increase your chances of success:

Prepare Comprehensive Financial Documentation

Your financial records may appear more complex than those of a salaried individual, making it essential to provide lenders with comprehensive documentation. Be prepared to submit complete and accurate records of personal and business finances, including tax returns, balance sheets, and income statements.

Build a Strong Credit Profile

Your credit score is a vital component of your mortgage application. Aim to improve and maintain a high credit score by paying bills on time, clearing outstanding debts, and refraining from multiple credit applications within a short period.

Compile a Solid Business Résumé

A well-structured business résumé showcasing your professional experience, industry certifications, and client testimonials can demonstrate stability and credibility, augmenting your mortgage application.

Consider a Co-applicant

If you’re struggling to meet all the mortgage requirements, consider adding a co-applicant with a steady income and strong credit score. A co-applicant may increase your chances of securing favourable mortgage terms and rates.

Mortgage Options for Self-Employed Individuals

There are several mortgage options available to self-employed borrowers, including:

Stated Income Mortgage

A stated income mortgage allows self-employed borrowers to qualify for a mortgage without following the traditional income verification process. Lenders will consider your credit score, down payment amount, and business history when evaluating your application.

Business-for-Self (BFS) Mortgage

BFS mortgages are tailored specifically for self-employed borrowers who are unable to provide traditional income verification. These mortgages come with a higher interest rate and may require a larger down payment.

Alternative Lending

If you’re unable to secure a mortgage through traditional lending channels, alternative or private lenders may offer flexible solutions catering to your unique financial circumstances.


Securing a self-employed mortgage amidst the picturesque landscapes of BC is an achievable goal for entrepreneurs and independent professionals. By understanding the intricacies of self-employed mortgage requirements, implementing expert strategies to enhance your application, and exploring various mortgage options, you can confidently navigate the complex world of home financing as a self-employed individual.

At Best Rates Mortgages, our team of dedicated mortgage professionals is committed to supporting BC’s self-employed community in achieving their homeownership goals. Contact us today to learn how our expertise and customized mortgage solutions can fuel your entrepreneurial aspirations and enable you to successfully obtain a self-employed mortgage in BC.

By Best Rates Mortgages | January 09th 2024
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