Qualifying 3. Source(s) of Income

There are generally two major income types - 1. Salaried 2. Self-employed

Generally, it is much better to have salaried income when applying for mortgage. It provides lender a sense of stability, and the Notice of Assessment (NOA) clearly shows your annual income under T4.

Individuals who are considered self-employed are generally commissioned or paid per contract. To use the income generated by self-employment, the business must establish for +2 years and can provide proof of existance by one of the documents: articles of incorporation, business number, or income on T1 General on NOA for last 2 years.

For individuals who do business with all cash and report very small income, if able to proof existance of business + 2 years, or proof being in the same industry for + 2 years (even business started just last month) if having credit score > 680, he/she can be qualified.

How much of my total income is used toward calcuation?

It is very simple Check your personal Notice of Assessment mailed back from the goverment each year after filing tax. If you are salaried individual, check the amount on T4 and see total employment income. If you are self-employed, check T1, line 150. It shows how much you reported the income from the business.

Those amount on NOA is the amount used for your income. The income then is used to calculate the debt service ratio.