Posted on: 26-02-12 00:10:25
Hi all,
I am from toronto and I am right now working as full time and I am living in my home for about 4 years and 6 months. In the next 2 weeks I will start to work on my own as independent contractor but I am worried that I wont be in a regular salary income. My home morgage is due for refinancing in 6 months and I was wondering what are the requirement to have it refinanced with the same bank. Will the bank require me to submit all the papers like letter from the employer and income proof as it did when I got my insurance approved 4 years back.
I dont think I will switch the back.
Thanks,
Azeem
Hi Azeem,
Your worry is somewhat genuine. The bank sees independent contractor as a self employed person and asks for income confirmation by asking for your Notice of Assessment for at least 2 years and some time may want to see T1 Generals as well. As it is with the new rules change, it is becoming difficult for the self employed persons to obtain mortgage.
Having said that you DO NOT need to worry if you are simply renewing your mortgage with the same bank as they will send you a renewal offer up to 30 days before renewal and would NOT ask you for any documentation but you would be at their mercy for the rates they offer in the renewal letter which may not be very competitive depending on the lender you are with for your mortgage right now. However, if you want to REFINANCE, meaning taking money out from your equity in the home OR want to switch to another lender for better deal or refinance, you would have to RE QUALIFY and it may cause some problems but as I mentioned earlier, it may not be a problem for simple renewal but rate may not be as good as you can get elsewhere.
Depending on your bank, you can contact them right now and ask for early renewal as some banks may offer it up to 6 months prior to maturity date without any penalties and you would not only be able to qualify but would get a very competitive rate right now as the bank / lender may like to keep you with them.
Good Luck.
p.s. You may want to get the question moved to Real Estate and Mortgage Thread instead of Arts and Culture.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Thank you Mr. Chopra.
Yes I am hoping to have my mortgage renewed with the same bank and I hope they do the renewal automatically. On the other hand I am trying to pay myself through my company and be under salary.
Regards,
Azeem.
Quote:
Originally posted by Azeem11
Thank you Mr. Chopra.
Yes I am hoping to have my mortgage renewed with the same bank and I hope they do the renewal automatically. On the other hand I am trying to pay myself through my company and be under salary.
Regards,
Azeem.
You are welcome.
I still believe your best bet would be contact your lender right now and ask for an early renewal with good interest rates and without penalties.
On the other hand, even if you are an employee of YOUR OWN COMPANY, you would not be treated as an employee and would have to show 2 years NOA for providing average income for qualifying and you would not have that 6 months from now.
So, do call your bank right now when you are still employed and ask about early renewal.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
