Neha Joneja, a Mortgage Agent Level 2 in Brampton, arranges self-employed mortgages for sole proprietors, incorporated owners, owner-operator truck drivers, contractors and commission earners. She reads your T1 Generals and Notices of Assessment, finds income lenders can add back, and compares bank, insured and B lender stated-income options when your tax return understates what you really earn.
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Why do self-employed borrowers get declined on paper?
Many of Neha’s self-employed clients in Brampton have strong credit, a healthy down payment and a steady business, yet a bank said no. Her Instagram posts on an 800+ credit score that still got rejected and $250K in savings that still got rejected come straight from files like these.
Lenders qualify you on the income your tax return shows, not on what your business deposits. Every write-off that lowers your tax bill also lowers your qualifying income.
For example, a renovation contractor in Fletcher’s Meadow grosses $140,000 in a year and claims $95,000 in expenses. The T1 shows $45,000 of net business income, and that is the number a bank starts from. Savings and credit don’t replace income when a lender calculates your debt service ratios (GDS and TDS: the share of your gross income that goes to housing costs, and to housing plus all other debts).
How do lenders calculate self-employed income?
Most lenders want two years of T1 General returns and the matching Notices of Assessment (NOAs), the summary CRA sends after processing your return. They usually average the two years, or use the lower year if income dropped. You also have to pass the stress test: qualifying at the greater of your contract rate plus 2% or 5.25%.
Which expenses can be added back?
Some expenses aren’t money that actually left your account. Depending on the lender, these can be added back:
- Capital cost allowance (CCA), the tax version of depreciation on a truck, van or equipment
- Business-use-of-home expenses, since your housing costs are already counted separately
Using the contractor above: if $18,000 of the $95,000 in expenses was CCA on the van and equipment, a lender that adds back CCA would see $63,000 instead of $45,000. Add-back rules vary by lender, which is why it pays to compare.
Approval subject to lender criteria (O.A.C.). Rates subject to change. Examples are for illustration only.
What mortgage options do self-employed borrowers have?
| Option | Who it suits | What lenders usually look for |
|---|---|---|
| Bank or A lender, full documentation | Established for 2+ years, declared income supports the mortgage | T1s, NOAs, no tax owing, good credit |
| Insured self-employed mortgage | Less than 20% down, income is documented | Traditional documents plus mortgage default insurance |
| Alternative or B lender, stated income | Real income is higher than the T1 shows | Business proof, bank statements, income reasonable for your industry, usually a larger down payment |
| Private lender | Short-term gap, such as tax arrears or a very new business | Home equity and a clear exit plan |
A B lender is an alternative lender with more flexibility on how income is proven, at a higher cost than a bank. Stated income means you declare a reasonable income for your business and support it with business records, not only your NOA. Neha’s Level 2 licence lets her compare all four routes, including private mortgage options used only as a short bridge.
Does the type of self-employment change the paperwork?
Sole proprietors, contractors and trades
Your business income sits on the T2125 statement inside your T1. A registered business name and HST registration help show the business is established.
Incorporated business owners
Your personal income is the salary (T4) or dividends (T5) you pay yourself, often kept low for tax reasons. Some lenders also consider your share of the company’s pre-tax profit, using two years of corporate financial statements.
Owner-operator truck drivers
With Highways 401, 407 and 410 minutes from most Brampton neighbourhoods, many of Neha’s clients are owner-operators. Fuel, repairs, insurance and depreciation can bring net income very low, so a lender that adds back CCA matters. The truck loan or lease counts as a debt if it’s in your name. If you recently moved from company driver (T4) to owner-operator, some lenders will consider your years in the industry.
Commission and gig income
Commission-based employees are usually treated like self-employed borrowers, with two years of income averaged. Rideshare and delivery income reported on a T2125 is assessed the same way.
What if I owe CRA or have HST arrears?
Taxes owing are one of the most common reasons a self-employed file stalls. Lenders check your NOA for a balance owing, and many ask for a CRA statement of account. Because unpaid CRA balances can lead to collection action, lenders want them cleared before or at closing.
On a refinance, arrears can often be paid to CRA from the new mortgage funds. On a purchase, you’ll usually pay first. Keep HST returns current too, since some B lenders use them to confirm revenue on stated-income files.
What you’ll need
- T1 General returns for the last 2 years, including the T2125 statement
- Notices of Assessment for the same 2 years
- CRA statement of account showing no balance owing (or a plan to pay it)
- Business registration, Master Business Licence or Articles of Incorporation
- HST registration and recent HST returns, if you’re registered
- Several months of business bank statements (for stated-income files)
- 2 years of corporate financial statements, if incorporated
- For truck drivers: carrier contract or settlement statements and your truck loan or lease statement
- 90 days of statements showing your down payment
How Neha handles a self-employed file
- Read your returns first: Neha reviews your T1s, NOAs and business setup before you apply, then works out what each lender type would count.
- Match the lender: Bank, insured, B lender or a short-term private option, whichever fits your documents and goals.
- Plan the next step: If a B lender is the right start, she maps how two more years of declared income could move you to a bank at mortgage renewal.
- Submit a clean package: A complete, well-explained file gets fewer conditions.
Should I declare more income before I buy?
That’s a conversation for you and your accountant, ideally a year or two before you buy. Fewer write-offs mean more tax but higher qualifying income. Neha can show what each income level would qualify for. Book a consultation and bring your last two NOAs.
File early in the year you plan to buy so your newest NOA is ready, then get a mortgage pre-approval. Planning a rental unit? See how rent can help on the investment property mortgage page. You’ll find all purchase options on the buy a home page, and you can talk it through in Punjabi or Hindi with Neha.
Frequently asked questions
Can I get a mortgage if I’ve been self-employed for less than two years?
Possibly. Some lenders consider a shorter history if you’ve worked in the same field for years, such as a tradesperson who went out on their own. Expect stronger documents or a larger down payment.
Do self-employed buyers in Brampton need 20% down?
Not always. If your income is documented on your tax returns, insured options with less than 20% down exist. Stated-income programs with B lenders usually ask for a larger down payment.
I’m an owner-operator truck driver. Will my truck expenses hurt my application?
They reduce your net income, which is what lenders start from. Depreciation (CCA) on your truck is a non-cash expense that some lenders add back, so lender choice matters.
What is a stated income mortgage?
It’s a program, mostly from B lenders, where you state an income that’s reasonable for your business and support it with bank statements and business records. Costs are usually higher than a bank mortgage, so it’s often a stepping stone.
Can I get approved if I owe money to CRA?
It depends on the amount and whether you’re buying or refinancing. Most lenders want arrears cleared, and on a refinance the balance can often be paid from the new mortgage at closing.
Can I go over my business documents in Punjabi or Hindi?
Yes. Neha works in English, Hindi and Punjabi, by phone, online or at her office at 7900 Hurontario St, Brampton, ON L6Y 0P6, near Hurontario St and Steeles Ave.
Sources
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- 4.8 on Google (18 reviews)
- FSRA-licensed brokerage #13812
- English · हिन्दी · ਪੰਜਾਬੀ
- Women-owned
Last reviewed by Neha Joneja, Mortgage Agent Level 2, November 2026. General information only, not financial advice for your situation.