Navigating the Mortgage Process with Unconventional Income in Ontario

March 28, 2024

If you're among the growing number of individuals earning income through unconventional means like royalties from Spotify, influencer gigs, professional gaming, freelance writing, artistic endeavors, YouTube content creation, or online ventures, you may find it challenging to secure a mortgage in Ontario. Most traditional banks have stringent requirements that don't always cater to those with non-traditional income sources. However, with careful planning and strategic steps, you can still achieve your dream of homeownership. Here are some key tips to consider:

  1. Register Your Business: If you earn income from music, influencing, gaming, writing, art, YouTube, or online ventures, consider registering your business and obtaining a GST/HST number. This not only legitimizes your income but also provides a clear financial trail for lenders.

  2. Transfer Income to Canadian Bank Account: To streamline the mortgage application process, ensure that all your income is transferred to your Canadian bank account throughout the year. This includes payments received via platforms like PayPal or cryptocurrencies.

  3. Maintain a High Credit Score: A strong credit score is crucial when applying for a mortgage. Make timely payments, keep credit card balances low, and avoid opening new credit accounts before applying for a mortgage.

  4. Save for a 20% Down Payment: While some lenders may accept a lower down payment, having at least 20% saved up can significantly improve your chances of being pre-approved for a mortgage. It also helps avoid costly mortgage insurance premiums.

  5. Consult with Mortgage Brokers: Work with experienced mortgage brokers who specialize in unconventional income situations. They can guide you through the process, understand your unique financial situation, and connect you with lenders who are more flexible with income verification.

  6. Consider B Lenders: If traditional banks are not an option, explore B lenders who cater to individuals with non-traditional income sources. These lenders often have more lenient criteria and can offer competitive mortgage rates.

By following these tips and exploring alternative options, individuals with unconventional income streams can overcome the hurdles of obtaining a mortgage in Ontario and move closer to their homeownership goals.