3 Things to Consider as a Business Owner Seeking a Home Loan in the BC Southern Interior
Penticton is the focal point of British Columbia’s South Okanagan-Similkameen, with more than 3,000 local business owners and counting. That number grows exponentially when you factor in surrounding townships and cities. This is indeed an ideal place to set up shop, be it brick and mortar, digital, or some hybrid of the two. But is it also a match for your home ownership prospects? With the right mortgage (and broker) it can be. Before you begin your search, here’s what you need to know.
Income and What Lenders Expect of You
Those small business write-offs you apply to your CRA tax forms to reduce your taxable income each annum can sometimes backfire when the time comes to represent your risk value to lenders. This is just one of the nuances to consider, but thankfully recent amendments to what is required of business owners seeking a mortgage (regarding down payments, etc.) have eased since 2018. This Carloni Mortgage Broker’s guide to Getting a Mortgage When Self-Employed applies not just to remote consultants, but to you as well. Give it a read, or simply give us a ring at 250.493.9111 for more convenient clarification.
Mortgage Programs Available to Business Owners in BC
Canada’s Big Banks often market mortgage programs for business owners. They vary by the season. For instance, at press the Royal Bank of Canada is advertising their RBC Self Employed Mortgage™ which allows qualified business owners the chance to borrow up to 80% of the purchase price or value of the property with no default insurance, or up to 95% with default insurance. Scotia Bank is also marketing their Scotia Mortgage for Self Employed program, which offers fixed rate terms from 6 months to 5 years, 7 years, and 10 years, along with their Scotia Flex Value® mortgages. Each of Canada’s banks has some program in-play that could work well for you.
Admittedly, required documentation for these types of programs can be burdensome, especially for business owners who already have enough on their plates. This is where a broker, with experience in mortgages for business owners comes in. We’ll manage all of the required documentation and cutting of the proverbial red tape for you. We’ll also vet the marketed mortgage programs, to confirm whether or not they are the right fit. If we feel that there is something better for YOU, we will connect you to those preferred programs. As a result you will enjoy a lower downpayment and/or lower monthly payments on your home loan. Our brokerage typically has access to lower fixed/variable rates, and we also have relationships with alternative private lenders.
Buying a House as a Business
There are some rare scenarios where business owners choose to buy a house as a corporate entity. There can be advantages to doing so, especially if the house will be leveraged to earn income as a short or longterm rental property. Reference our article Can a Business Buy a House to learn more. Or, call Carloni Mortgage Brokers at 250.493.9111 to ask about this, and other creative ways to get a mortgage as a business owner.
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