Securing a mortgage can be challenging for Canadian influencers, gig workers, and other self-employed individuals who lack traditional income verification. Fortunately, some lenders in Canada specialize in mortgages for self-employed borrowers, offering flexible documentation options, competitive rates, and tailored loan products. Here’s a look at the top 10 best mortgage lenders for self-employed borrowers in 2024 to help you find the right fit for your unique financial needs.
1. TD Canada Trust
TD is known for its flexible mortgage options for self-employed borrowers. They offer a variety of documentation alternatives to verify income, including bank statements and business financials.
- Key Features: Flexible income verification options, competitive rates, and a variety of mortgage types, including fixed and variable-rate mortgages.
- Best For: Established self-employed borrowers with at least two years of income history.
2. Scotiabank
Scotiabank offers a “Business for Self” mortgage program designed specifically for self-employed individuals. They allow various forms of income verification and are known for offering attractive rates and terms.
- Key Features: Accepts alternative documentation, flexible down payment options, and access to financial advisors familiar with self-employed needs.
- Best For: Gig workers and freelancers who have solid financial records but limited traditional income verification.
3. RBC Royal Bank
RBC is one of Canada’s largest lenders and offers flexible mortgage options for self-employed borrowers, allowing income to be verified through business and personal banking documents.
- Key Features: Customized mortgage solutions for self-employed clients, flexible repayment options, and access to competitive rates.
- Best For: Self-employed borrowers looking for personalized mortgage solutions with Canada’s largest bank.
4. CIBC (Canadian Imperial Bank of Commerce)
CIBC’s “Self-Employed Recognition Mortgage” program caters to freelancers, contractors, and gig workers. They accept a range of income verification options, including bank statements, Notice of Assessments, and business financials.
- Key Features: Flexible qualification criteria, personalized support, and a variety of mortgage types.
- Best For: Self-employed borrowers with non-traditional income sources, especially those looking for a straightforward mortgage experience.
5. National Bank of Canada
National Bank provides flexible mortgage options specifically designed for entrepreneurs, gig workers, and freelancers. Their “All-In-One” mortgage can be customized based on your needs, making it ideal for borrowers with variable incomes.
- Key Features: Customizable mortgage products, variable income options, and competitive interest rates.
- Best For: Entrepreneurs and self-employed individuals who need a mortgage product that adapts to varying income.
6. Manulife Bank
Manulife Bank is known for its flexible mortgage solutions that include an all-in-one product combining mortgage and banking needs, making it easier for self-employed individuals to manage cash flow and mortgage payments.
- Key Features: All-in-One banking and mortgage account, interest rate flexibility, and options to consolidate debt.
- Best For: Self-employed individuals looking for an all-in-one solution to manage both their mortgage and daily finances.
7. BMO (Bank of Montreal)
BMO’s mortgage programs for self-employed Canadians focus on offering alternative income verification methods, which is beneficial for borrowers who don’t have standard employment records.
- Key Features: Flexible documentation requirements, attractive rates, and a variety of down payment options.
- Best For: Freelancers and gig workers who need flexibility in their mortgage application process.
8. Alterna Savings
Alterna Savings is a credit union that provides specialized mortgage options for self-employed individuals. They have a reputation for working closely with clients to develop customized solutions and consider non-traditional income sources.
- Key Features: Flexible underwriting, personalized service, and competitive rates for credit union members.
- Best For: Self-employed borrowers who prefer a credit union’s personalized approach to mortgage lending.
9. Meridian Credit Union
Meridian is one of Canada’s largest credit unions and offers a “Business for Self” mortgage, which is specifically designed for self-employed applicants. Meridian’s lending policies are flexible, and they work closely with borrowers to understand their financial needs.
- Key Features: Lenient income verification requirements, personalized member service, and competitive rates.
- Best For: Gig workers and self-employed individuals who value personalized service and flexibility.
10. Home Trust
Home Trust is a non-bank lender that specializes in mortgages for borrowers with unique financial situations, including self-employed and gig workers. Their mortgages cater to those with variable income and offer alternative documentation options for verification.
- Key Features: Flexible qualification requirements, specialized mortgage products for unique income structures, and a faster approval process.
- Best For: Self-employed borrowers with less-than-perfect credit or those looking for non-bank mortgage options.
Tips for Applying for a Self-Employed Mortgage
When applying for a mortgage as a self-employed borrower, you may need to provide additional documentation and take steps to strengthen your application. Here are some tips to improve your approval chances:
1. Organize Your Financial Records
Prepare at least two years of tax returns, Notice of Assessments, and bank statements. If you’re newer to self-employment, provide as much documentation as possible to show consistency in income.
2. Consider a Larger Down Payment
A down payment of at least 20% can improve your approval chances and reduce your monthly payments, which may allow for more flexibility with variable income.
3. Work with a Mortgage Broker Experienced in Self-Employed Mortgages
An experienced mortgage broker can connect you with lenders specializing in self-employed borrowers and guide you through the documentation requirements.
4. Check Your Credit Score
A credit score of 650 or higher is generally preferred by lenders. Check your credit report regularly, pay bills on time, and keep credit balances low to maintain or improve your score.
5. Explore Alternative Lenders
If you face challenges with traditional banks, consider credit unions or non-bank lenders, like Home Trust, who specialize in non-traditional income mortgages.
Key Takeaways
The best mortgage lenders for self-employed borrowers offer flexible documentation, competitive rates, and personalized support for Canadian influencers, gig workers, and freelancers. By choosing a lender that understands self-employment income structures and preparing a strong application with detailed financial records, you can improve your chances of securing a mortgage. Consider working with a mortgage broker who specializes in self-employed mortgages to simplify the process and help you find the right lender for your unique needs.
