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For self employed individuals, it can sometimes be difficult to qualify for a traditional mortgage. Lenders focus on several factors when making the decision to approve or decline a mortgage application, and reported income is one of the main criteria. When a self employed individual expenses business related items, they reduce their reported income, which, in turn, reduces the amount of tax they pay. One drawback of this process for the self employed is the result of a lower reported income that is given to a prospective lender, often causing mortgage applications to be declined.

Thankfully, lending programs have been created to cater specifically to the self employed. These programs offer financing up to 95% of the real estate value for a purchase, and 90% on a refinance. Those who have been self employed for less than two years will still be considered, providing they have been employed in a related field for an extended period. These programs do not require income verification from a personal notice of assessment. Instead, the applicant completes and signs a declaration stating income and time spent self employed. A lawyer is to witness the applicant’s signature on the declaration, which will allow a lender to utilize the information when processing a mortgage application.