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Self Employed Mortgages in Alberta
Self-employed borrowers in Alberta often face unique challenges when applying for a mortgage. While maximizing tax deductions helps reduce taxable income, it can also result in lower reported income on tax returns—making mortgage qualification more difficult.
Specialized self-employed mortgage solutions are designed to account for this and help business owners secure home financing.
Different kinds of Lenders - A, B and Private
1. Best-Rate Mortgage Lenders (A-Lenders)
Best-rate mortgage lenders provide the lowest interest rates for borrowers who meet traditional lending criteria.
Typical requirements:
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Provable income
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Minimum credit score: 680 (sometimes 650 with explanation)
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Valid exceptions may include:
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Temporary credit dips from multiple recent credit checks (e.g., car loans)
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New to Canada applicants who have not yet established credit
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Benefits:
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Lowest interest rates in Edmonton and Alberta
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Predictable terms with standard lending rules
Alternate Mortgage Lenders (B-Lenders)
B-lenders are ideal for borrowers who don’t qualify for traditional mortgages but still want financing in Edmonton or Alberta.
Key features:
- Minimum down payment: 20%
- Flexible approval criteria. Can work outside traditional lending “rule boxes”
- Typically ~2% higher interest rates than A-lenders
- Expect 1–2% lender fees
- Self employment income is determined via deposits to your business account, not tax returns.
Who benefits:
- Self-employed borrowers
- Borrowers with inconsistent income
- Clients rebuilding credit
3. Private Lenders
Private lenders are a financing option for borrowers needing highly flexible, short-term solutions.
Key points:
- Minimum equity/down payment: 35%
- Higher interest rates and fees than A- or B-lenders
- Useful for self-employed borrowers or those with unique financial situations Example: A self-employed client needed $50,000 for a business project without disturbing their existing low-rate mortgage. Using a private second mortgage: they paid part of the loan back at each renewal and the interest and fees were all tax-deductible. It was fully paid off in 3 years.
Private lenders can be an excellent solution when used strategically.
Choosing the Right Mortgage Lender in Edmonton.
Whether you qualify for A-lenders, B-lenders, or private lenders, working with an experienced mortgage broker in Edmonton, Alberta ensures you:
- Understand your borrowing options
- Secure the best rate for your situation
- Avoid costly mistakes
The key is using the right lender at the right time for your financial goals.
Please don't hesitate to reach out with any questions, Nikole