Self-Employed Mortgage Pre-Approval

A self-employed mortgage pre-approval is an upfront, detailed review of your mortgage application that confirms how much you can realistically borrow before you start looking for a home.

Unlike many quick bank “pre-approvals” that rely on estimates, online calculators or automated systems, a proper self-employed mortgage pre-approval reviews all of your income documents, multiple lender options and a variety of qualification methods.

Completing this work upfront helps prevent surprises later in the home buying process and gives you a clear, reliable budget when making an offer.

Most importantly, it puts you in a stronger position to act with confidence, knowing your mortgage approval is built on real numbers — not assumptions.

Banks and other mortgage lenders in Canada often decline self-employed mortgage applications once you have received an accepted offer because the business income was not reviewed properly as part ofthe pre-approval process and doesn’t fit into that lenders self-employed mortgage lending guidelines. Tax write-offs, variable income, being a newer businesses, or high debt loads can reduce your qualifying income on paper, even when your business cash flow is strong.

For self-employed business owners, getting a proper mortgage pre-approval completed is the most important step to take before starting your home search.

Because self-employed income is reviewed differently than traditional salaried income, completing a proper mortgage pre-approval helps ensure your income is positioned correctly, your documents are collected and reviewed upfront, and your true buying power is confirmed before you start shopping for a home.

We do this all at the beginning of your home buying journey so you can shop for a home with confidence and avoid delays & surprises later in the process.

Self-employed mortgage pre-approvals are available to many types of business owners, including sole proprietors, incorporated professionals, contractors, freelancers, and commission-based earners. Even newer business owners may qualify depending on income stability, credit, and down payment. Being self-employed does not automatically disqualify you from getting approved for a mortgage—it simply means that we should start the pre-approval process early when you are looking for a new home.

Self-employed mortgage requirements vary by lender, but most lenders focus on income consistency, overall financial strength, and credit history. Lenders look at how your income is earned, how long the business has been operating, and how your finances are structured. With the right documentation and lender match, many self-employed borrowers qualify for a mortgage easier than they had expected.

A proper pre-approval starts with the right documentation. Commonly requested self-employed documents include your last two years personal tax returns (T1 Generals), most recent two years Notices of Assessment (NOAs), business financial statements, bank statements, proof of down payment, and incorporation documents if applicable. Reviewing these upfront as part of the pre-approval process allows us to review your income accurately and reduces the risk of delays or declines later in the home buying process.

Lenders calculate self-employed income differently depending on the lender and program we are using to qualify. Most lenders will use a two-year average of the income reported on your personal tax returns, while others allow us to use add-backs for certain expenses or use other methods like bank statements, home equity, investments or RRSPs to help qualify. Understanding how each lender views income is key to getting your self-employed mortgage application approved.

Self-employed borrowers in Canada have access to a range of mortgage options, including big banks, credit unions, and alternative lenders. Each lender option has unique benefits to business owners, including different income requirements, flexibility, qualifying ratios and approval criteria. Comparing these options during the pre-approval process ensures your application is matched to the lender most likely to approve it—often with better terms than expected.

The mortgage pre-approval process can be straightforward and is designed to be clear & easy.

It starts with a short discovery call to understand your goals, followed by completing a simple onlne application and full document review.

Once all of your information & documents have been received and verified, your application details are matched with the right lender and you will receive a mortgage pre-approval that outlines your buying power and other information — so you can shop for a home with confidence.

Most mortgage pre-approvals are valid for 90-120 days and may need updating if income, credit, or interest rates change. For self-employed borrowers, it’s important to reassess your mortgage pre-approval if your business income shifts or when its time to file your yearly taxes with the CRA. Keeping your pre-approval current ensures it remains accurate and upto date when you’re ready to make an offer on your new home.

1. Many self-employed borrowers run into problems not because they can’t qualify for a mortgage, but because their pre-approval wasn’t done properly upfront. One of the most common mistakes is relying on online calculators or quick bank pre-approvals that don’t review any income documents. These tools often assume salaried income and ignore tax write-offs, business structure, and cash flow — leading to an inflated and unreliable approval amount.

2. Another common issue is going to only one bank for a pre-approval. Every lender treats self-employed income differently, and being declined by one bank does not mean you’re out of options. Without comparing multiple lenders and programs, many business owners are told to wait unnecessarily or reduce their expectations, even when better solutions exist.

3. Waiting until after an offer is accepted to fully review income is another costly mistake. This can result in a declined firm approval, lost deposits, wasted inspection fees, and missed opportunities on a home you already thought was secured. A proper self-employed pre-approval should be based on verified numbers before you start shopping.

4. Finally, many self-employed borrowers delay seeking a second opinion. Instead of exploring alternative lenders or specialized programs, they stay on the sidelines for years assuming homeownership isn’t possible. In reality, the right strategy and lender match can often turn a “no” into an approval much sooner than expected.