Knowledge centre
Because the lender and mortgage professionals must understand whether the money is genuine business revenue, borrowed money, a transfer between owned accounts or funds from another person. A clean paper trail protects both the approval and the client.
Possibly, but moving corporate money into a personal home purchase can create tax, shareholder-loan, documentation and lender-source-of-funds issues. The withdrawal should be planned with an accountant before the offer becomes firm.
A difference is not automatically a decline, but it must make sense. The Notice of Assessment summarizes CRA’s assessment, while bank deposits show cash movement; neither explains the complete business without reconciliation.
Sometimes, but company revenue and retained earnings are not automatically the shareholder’s personal income. Certain lenders may analyze salary, dividends, ownership, corporate cash flow and eligible add-backs to determine what income is sustainable and available.
Some alternative/B lenders review roughly six to twelve months of business bank statements, identify recurring gross business deposits and subtract reasonable operating expenses to estimate supportable income. This is a lender method—not an OSFI or FCAC formula.
No. Some programs may add back eligible non-cash, one-time or policy-approved expenses, but ordinary costs required to keep the business operating normally cannot simply be ignored.
No. CMHC says income for a sole proprietorship or partnership may be grossed up by 15% or assessed through eligible add-backs. “May” is not an automatic increase, and it is not a rule for incorporated business revenue.
Potentially. CMHC has a self-employed mortgage-insurance program with several documentation options, but the insurer and lender must still be satisfied that the income, business and overall application are credible.
No. There is no universal law saying every self-employed borrower must operate for exactly two years. Two years is a common lender or insurer evidence standard, but exceptions and different programs can exist.
Not necessarily. Your tax return reports income under tax rules; a mortgage lender separately decides what stable, supportable income it will use to assess repayment. The two numbers may be related without being identical.