Canadian investors who are self-employed and looking to claim rental income in order to qualify for a loan will have more freedom to do so come Sept. 28, something that agents with those clients applaud.

“It will certainly help that segment of buyers because it’s well-known that it’s a challenge for those who are self-employed to qualify for a mortgage,” Davelle Morrison, a real estate agent with Bosley, told REP. “A lot of self-employed people spend a lot on expenses and don’t count income all the time so when the lenders see that, they tend to deny them.

“This rule change gives them another avenue to prove their have significant income coming in.”

Any investor looking to take advantage of this option will have to possess a Beacon score of no less than 680 while anyone who puts less than 20 per cent down will have to secure mortgage default insurance.

According to the new rules, the CMHC will consider up to 100 per cent of gross rental income from a two-unit owner-occupied property that is the subject of a loan application submitted for insurance. The annual principal, interest, municipal tax and heat for the property, including the secondary suite must be used when calculating the debt service ratios.

Full article here