Self-employed Canadians seeking to buy a home may soon find it easier to secure a mortgage after changes announced by Canada Mortgage and Housing Corp.
CMHC said self-employed people make up about 15 per cent of Canada’s population, but they may have difficulty qualifying for a mortgage because their incomes may vary or be less predictable.
Changes unveiled last week by the federal mortgage insurance agency are aimed at giving lenders more guidance and flexibility when it comes to self-employed borrowers.
In the changes, CMHC said several factors could be used in future to support a lender’s decision to give a mortgage to self-employed borrowers who have been operating their business for less than two years or have been in the same line of work for less than two years.
CMHC said those factors could include things such as:
- Acquisition of an established business.
- Sufficient cash reserves.
- Predictable earnings.
- Previous training and education.
CMHC said that previously, those types of applications could be accepted, providing that a “solid rationale” was noted in the lender’s loan file.