BCMortgageHelp.com Now Helping Self-Employed in BC Find Lenders Who Haven't Closed Doors to Stated Income Borrowers
February 29, 2012 (PRLEAP.COM) Business NewsBCMortgageHelp.com has just opened its doors to self-employed and stated-income BC residents looking for a purchase or refinance mortgage. The service connects self-employed people with a mortgage broker who specializes in dealing with alternative, or niche lenders who aren't as restrictive as mainstream lenders.
The demand for this type of service is only increasing, as qualifying for a mortgage is becoming harder and harder for many self-employed borrowers in BC if they're only knocking on the doors of the mainstream lenders.
Canada Mortgage and Housing Corporation (CMHC), the corporation that is responsible for insuring Canadian mortgages, informed banks in January this year that it is reaching the limit on mortgage insurance it can offer and may have to limit the number of mortgages it insures. In 2008, the cap for insurance liability was raised to $600 billion in 2008.
This, along with news from Ottawa that it may tighten up rules for determining whether the self-employed can qualify for loans with "stated-income", financial institutions now are rethinking their lending requirements for some of their mortgage products.
Recently FirstLine Mortgages announced that it no longer offers "stated-income" mortgages. With a "stated-income" mortgage, as long as the self-employed have been in business for a minimum of three years, they have been able to state their income for borrowing purposes, providing minimal documentation as proof.
A recent review of the major banks shows that they are still offering customized mortgage packages to the self-employed or people with rental properties, however, those low fixed rate mortgages at 2.99% available early in the year have now been withdrawn.
With renewals at the discretion of lenders, borrowers with mortgages renewing this year could experience some difficulties. This may leave 15.6% of self-employed Canadians (according to Industry Canada) out in the cold.
Kam Brar, a mortgage broker who works in tandem with BCMortgageHelp.com, says that he has noticed that lenders definitely have tightened the reins when it comes to lending to the self-employed in general and have really clamped down self-employed borrowers who state their income and cannot actually prove or confirm it with tax returns.
Brar went on to reassure those who may be caught in this situation, "Fortunately not all lenders have pulled out. We still have some niche lenders who are willing to cater to the self-employed. These lenders recognize the unique needs for these people and in most cases we are still managing to get the mortgage done, it is just taking longer."
BCMortgageHelp.com details how Vancouver mortgage brokers work with specialty lenders whose lending requirements are less restrictive than the large financial institutions. Borrowers will find information focusing on helping them find boutique and specialty lenders who are willing to work people who find themselves in challenging situations. Also featured are profiles of all of the major lending companies in Canada.