Rick Howe: Mortgages for the self-employed

Talking about mortgages for self-employed

Talking About Mortgages for the Self-Employed Don’t feel like listening? Check out the audio transcript below.

This is a five minute business builder with Rick Howe, where your business comes first, on News 95.7.

Talking mortgages for self-employed

Rick: [00:00:09] All right. 12:22 is our time here right now and occasionally we set aside a few moments to hear from members of the local business community. Joining me in the studio for a chat here this afternoon is senior mortgage adviser Clinton Wilkins. Clinton, Good afternoon to you.

Clinton: [00:00:22] Thanks for having me Rick.

Rick: [00:00:23] Should I say Clinton Wilkins, mortgage broker of the year?

Clinton: [00:00:26] Well you can call me really whatever you want. But mortgage broker the year I think would be great.

Rick: [00:00:30] Yeah. Didn’t you win Mortgage Broker of the Year?

Mortgage broker of the year

Clinton: [00:00:32] I did, yeah. It’s the second year in a row I’ve been nominated and I won again this year. I won for 2018 and recently, just this past Friday night, in Toronto for 2019 and I was competing with mortgage brokers from across the country.

Rick: [00:00:43] Well that’s quite an honour.

Clinton: [00:00:44] Which is pretty amazing like in Halifax we can compete on the national level.

Rick: [00:00:47] Yeah.

Clinton: [00:00:48] You really think that, you know, in terms of business it’s very Toronto centric, Vancouver centric, but there’s a lot of really great things going on here in Halifax.

Rick: [00:00:55] How’s the housing market in this city? I’ve have been hearing conflicting kind of reports.

Growth in Halifax

Clinton: [00:00:59] I think it’s booming. Personally, I can tell you that we’ve never been busier.

Rick: [00:01:03] Really?

Clinton: [00:01:04] It’s insane. And I think, you know, in terms of the transactions we’re definitely doing more and more transactions. The prices are definitely going up. I read an article recently that the overall in Nova Scotia the house prices were up almost 4.5 percent.

Rick: [00:01:19] You got like that.

Clinton: [00:01:19] You know, we’ve been very flat over the last couple of years. You know, maybe 1 to 3 percent growth but when you know what we’re getting into the 4.5 percent growth range across the province that’s pretty amazing. In Metro, you know, we’re up more and I think that’s really driven by the lack of supply.

Rick: [00:01:34] So this is a seller’s market right now?

Halifax, seller’s market?

Clinton: [00:01:35] I would say it’s a seller’s market. So, you know, if you’re sitting on the fence in terms of getting your house listed I think, you know, listing it would be great. We are pre approving borrowers every single day and they’re going out there looking for inventory so I think you know definitely getting your house listed, it’s a great time. In terms of buying, people asked me that like well should we wait for it to cool down. I don’t think we’re gonna be in a cool down for quite some time here in Halifax. We’ve never had a boom, we’ve had a very steady market. But the more it heats up and the less supply is just going to drive that price up. So would you rather buy now or would you rather buy later at a higher price.

Rick: [00:02:11] Yeah, I had a conversation with a real estate agent who thinks that we have at least 10 years of good times ahead here.

Clinton: [00:02:17] Which is very exciting. I’m ready for it. You know what in our office in Dartmouth I can tell you that you know we have lots of capacity in terms of seeing additional clients.

Rick: [00:02:25] You want to talk a bit about the mortgage for self-employed people here this afternoon.

Clinton: [00:02:29] Self-employed is a really hot topic.

Rick: [00:02:31] Really? Why why is that?

More Canadians are becoming self-employed

Clinton: [00:02:33] More and more Canadians are becoming self-employed everyday. And I can tell you when you’re self-employed the perception is that it’s more difficult to get a mortgage.

Rick: [00:02:40] One would think that.

Clinton: [00:02:41] We’re doing mortgages for self-employed every single day. I think when self-employed borrowers walk into a bank branch it’s a little bit daunting because oftentimes they’ve been told no before. You know, when you’re self-employed you’re you know you’re taking a risk you’re going on you know you’re going on your dream and you’re in a leap and there’s some uncertainty there.

But I can tell you we’re lending money to self-employed borrowers every day. Typically the standard verification terms of self-employed income is two years of their tax returns on their personal income. So we look at an average of what they’ve been claiming for example maybe what they’ve claimed in 2017 and what they claimed in 2018 and we would do a two year average and that’s how we verify their income.

Is self-employment seen as a bigger risk?

Rick: [00:03:17] But, they’re a bigger risk obviously though?

Clinton: [00:03:18] You know what I think self-employed is actually a lower risk.

Rick: [00:03:21] Really? OK.

Clinton: [00:03:21] You know I’m self-employed if I need to make a little bit more money I can just work harder. You know, for you you’re on a salary you come here every single day and do the show but you’re getting paid the same probably biweekly.

Rick: [00:03:31] That’s true.

There are options for mortgages for self-employed

Clinton: [00:03:31] You know, the self-employed people, you know, they can work as a little or as much as they want, in theory. There’s some really great programs out there for self-employed and I can tell you that the federal government has definitely urged the lenders to become more flexible on their income verification in terms of self-employed. I can tell you that there’s some lenders that will allow us to you know gross up self-employed income. You know, if you’re a sole proprietorship or you have a partnership they’ll allow us to gross the income up.

There’s also some lenders that if you are, you own a corporation they’ll allow us to add back 40 to 60 percent of the corporate income, you know, with financial statements. So there’s definitely some programs and you know stated income still does exist. I know it was really a hot topic in the past and, you know, there’s some confusion about stated income but it’s definitely still available. You know, in terms of doing a purchase if we’re looking at you know full documentation so we can prove the borrower’s income they can qualify for as little as 5 percent down just the same as someone who has a salary.

And for me I really love self-employed borrowers I would say probably about 30 percent of our customers are self-employed. I think it’s just because you know when you’re self-employed you need that expert advice sometimes you need someone to hold your hand and coach you and you know really point you in the right direction that’s really our specialty. I think you know there’s a lot of advantages.

Now what?

Rick: [00:04:46] So, if people wanted, or if they have any questions give they give you a call?

Clinton: [00:04:49] Certainly give us a call. You know, I think seeking unbiased mortgage advice is certainly very valuable. You can check us out online at teamclinton.ca/radio. Lots of great information on our website. And I’m going to be on, on Saturday with Todd at 10 a.m. So if anybody wants to call in we’re going to take some questions live on the air.

Rick: [00:05:06] All right well good to hear from you again Clinton. Thank you very much. Thanks for dropping by. Clinton Wilkins with us here this afternoon.

If you have any questions about mortgages for the self-employed, get in touch with us here.