STATE YOUR INCOME - The Self-Employed Advantage
Posted by Sean Stewart
on 1 October 2020
 "STATE YOUR INCOME - The Self-Employed Advantage")
Stated income programs are still alive and well. There have been some changes over the years with the changes in federal regulations, but stated income is still a valuable tool for the self-employed business owner to qualify for the mortgage you need.
There is some reasonability to what income you can state, it must be reasonable for your business and industry. You can't make up any number you want, it has to fit within reasonable guidelines. The story needs to make sense.
Comparatively, if you are a general contractor that earns gross revenue of $100,000 a year, you would expect a GC to have a lot of material and labour costs. So, stating an income of $50,000 or maybe $60,000 is more reasonable. The story has to make sense for the type of business and industry.
This type of qualification is more subjective and you will need an experienced mortgage broker to help you put together the numbers and the right story.
Stated income programs allow you to literally state your income to use to qualify for your mortgage. This is only available to the self-employed.
There is some reasonability to what income you can state, it must be reasonable for your business and industry. You can't make up any number you want, it has to fit within reasonable guidelines. The story needs to make sense.
For example, if you are an IT professional running your own consulting business and you earn gross revenues of $100,000 a year, stating $80,000 as qualifying income could be reasonable. As an IT professional you probable do not have a lot of overhead or expenses as a consultant, so it makes sense to be stating a high net income relative to your gross revenue.
Comparatively, if you are a general contractor that earns gross revenue of $100,000 a year, you would expect a GC to have a lot of material and labour costs. So, stating an income of $50,000 or maybe $60,000 is more reasonable. The story has to make sense for the type of business and industry.
Remember stated income is not about your actual expenses and it is not about what you show on your tax returns. It is more of a reasoned approach to what your business could support for mortgage qualification. We do need some documentation that supports your current business activity.
This type of qualification is more subjective and you will need an experienced mortgage broker to help you put together the numbers and the right story.
Contact Us
For more information on stated income for the self-employed, contact your local Mortgage Broker, Sean Stewart at 905-427-9596 or sean@seanastewart.comAuthor:Sean Stewart
About: Sean Stewart has enjoyed a successful and rewarding career prior to joining Mortgage Architects. Sean worked as a professional accountant for several large financial institutions working in the mutual fund and hedge fund industry. His career has taken him to live and work in several countries, including Ireland, Poland and the USA.
Following his accounting career, Sean purchased a flourishing contracting business and ran that successfully for 5 years. Sean understands the rewards and challenges of owning your own business. He enjoyed giving back to the community and helping people through difficult situations.
This experience now allows Sean to specialize in guiding corporate professionals and entrepreneurs who are in business for themselves through the confusing process of obtaining the best mortgage solution. Sean uses his 20 years of experience in finance, accounting and real estate to guide you to make the right decisions for you.
Sean is supported by a wonderful and talented family. Happily married for more than 10 years, Sean and his wife have a son they spoil constantly.
In his spare time, Sean is an avid baseball fan and enjoys cheering for the Toronto Blue Jays, which can at times be a source of misery. In the summer, he enjoys nothing more than a round of golf with friends and colleagues, Fore! Cuban cigars are his special indulgence
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