Self-employed Canadian mortgage borrowers enjoy 15% gross-up option

Self-employed borrowers can now enjoy a new approach to income determination and verification through a simple 15% gross up of the total income (line 150) on their Canada Revenue Agency (CRA), Notice of Assessment (NOA). Grossing up self-employed income by an amount representative of self-employed borrower’s eligible deductions puts self-employed borrowers into a fast and streamlined application process similar to what salaried employees already enjoy. Self-employed borrowers who have eligible deductions in excess of the 15% of their income, will have the option to provide financial statements and to add back specific eligible add backs, in lieu of the 15% gross up, to their income.

Self-Employed Bonus Mortgage Example:
Mr. Smith's Notice of Assessments shows that he declares $50,000 net income per year.  With this new program we can now bonus his income by 15% ($50,000*.15%= $7,500). For qualifying purposes we can now use an income of $57,500.