Are you eager to get a mortgage? But, your declared misleading income compared to real income is a problem. Rest assured, there is now a solution to overcome this pitfall: the Alt-A program.
Alt-A: the principle
The Alt-A Mortgage Program is for self-employed individuals. Thanks to this one, the real incomes can simply be declared (supported by documents proving that these incomes are existing and coherent). To qualify for this type of mortgage, you must make a minimum down payment of 10%.
The conditions of an Alt-A loan
In addition to the basic conditions mentioned above, specific criteria must also be met in order to benefit from the Alt-A program. If the review of each file is done individually, here are the profiles that are most likely to see their mortgage application file be accepted:
- A small or medium-sized service-based business with a customer base that is partially private.
- The company has been in existence for at least 2 years. It must show a steady increase in its income and is obviously profitable.
- Proof that the company is in tax order (sera), solid credit record.
- For purchase of a house, apartment or duplex maximum (if duplex, housing must be occupied) of a maximum value of one million.
Alt-A loans are capped at $ 600,000. For more information about the Alt-A program, your mortgage broker is at your disposal.
Where to get a mortgage for self-employed?
The Alt-A program is not offered by all banks and credit institutions. The mortgage rate is a little less attractive than a conventional loan; at worst, it will be 0.2% higher. Your mortgage broker will be able to identify the most attractive lender for your profile, as well as help you build your case.
To insure the mortgage, you will only have one option: Genworth. As is the case with rates, the price of insurance will be a little higher when it comes to an Alt-A loan.
In sum, the terms of an Alt-A mortgage are more restrictive than those of a conventional mortgage. This program is nevertheless very useful for self-employed workers who are unable to buy a home via the usual route.
Our mortgage brokers will be able to determine if this last resort is to consider for you. Thus, we can help you to benefit from the best possible conditions.