How a Self-employed Person Can Get Preapproved

Depending on the applicant’s circumstances, banks may also require bankruptcy discharge papers, copies of leases, maintenance agreements, and others. Self-employed persons can get preapproved, but they must meet additional requirements and get insurance from CMHC. Canadian banks take different factors into consideration, including debt-to-income ratio, payment history, income level, and others. Borrowers with a poor history are not likely candidates or they will be offered less favorable conditions. They may get a higher interest rate. 


Businesses and self-employed individuals may have to present their income tax returns, current balance sheets, and others. Applicants may want to include information such as homeowner’s insurance, employment and residential history, income verification documents, and others. Other information to supply includes loan balances, number of loans, lines of credit and credit cards, and monthly payments. Businesses that own land, machinery and equipment, and plants and receive rent should supply information about their income.

The amount owed, types of loans, and other factors play an important role. Factors such as regular payments and length of credit history are taken into consideration and affect the credit score. The location, cost, and history of the property also pay a role

The applicant may qualify for bridge financing, equity mortgage, or conventional mortgage, depending on the bank. There are different loans to consider, including first-time homebuyer loans, tracker and fixed rate products, and others. The outcome of the application process depends on the type of mortgage and funds in hand.

The amount of paperwork and documents to present depend on the financial institution. Applicants should present information such as tax, investment, and bank documents, paycheck stubs, etc. Some banks require that applicants present information such as recent tax returns, their investment accounts, and more. Applicants for a mortgage loan should present information about different sources of employment and investment income. There are different sources of income, and some of them are taxable while others are not. It is advisable to include different sources of income that prove one’s ability to make regular payments. Some examples include income from barters, interest and dividends, canceled debt, and pensions. Other sources of income include some types of insurance policies, inheritances, gifts, compensatory damages, and others.

Banks require information about the applicant’s legal sources of income, including taxable and tax-free. If unsure whether to include some source of income (for example, fellowships or scholarships), it is best to ask your bank of choice.