It’s long been accepted that self-employed Canadians have a difficult time of qualifying for a lot of the same privileges that other Canadians have. But now, we may be able to exclude getting a Mortgage from that list.
The new guidelines set by Canada Mortgage and Housing Corp. (CMHC) have made it easier for anyone who has been self-employed for less than two years to qualify for a Mortgage. A far cry from the previous standards.
These new rules will incur lenders to consider additional factors in their decision-making process regarding Mortgages, including predictable earnings, cash reserves, and education.
“Self-employed Canadians represent a significant part of the Canadian workforce,” writes CMHC chief commercial officer Romy Bowers, in a statement. “These policy changes respond to that reality by making it easier for self-employed borrowers to obtain CMHC mortgage loan insurance and benefit from competitive interest rates.”
Approximately 15 per cent of Canadians identify as self-employed, according to CMHC data, and that number will continue to grow as the “gig economy” continues to increase. Now more than ever are Canadians seeking self-employment to create jobs in these new and growing industries.
While approved lenders, including the big banks, are under no obligation to observe these new guidelines, it is most likely that each group decided to follow the rules in their own way.
CMHC spokesperson Audrey-Anne Coulombe said, ““Implementation of CMHC guidelines may vary among lenders… These new guidelines are meant to be principle based and not to be too prescriptive to provide maximum flexibility for lenders.”
The overall objective of these new rules are to provide additional guidance to self-employed Canadians who are seeking qualification for a Mortgage.
“These policy changes will make it easier for self-employed borrowers to obtain CMHC mortgage loan insurance and benefit from competitive interest rates,” she shares.