Commission Sales Person Mortgage
Getting a mortgage to buy a home for a self-employed worker and a commission sales person poses particular challenges.
In a survey of self-employment, Statistics Canada reports that nearly one worker out of six in Canada in 2000 was self-employed and most of these became, and remained, self-employed by choice.
A self-employed borrower and a commission sales person normally do not have the same income stability that regular salaried workers in Canada have. This segment of the Canadian labour force, like a commission real estate agent, can apply for a regular mortgage to finance or refinance a home but the process is onerous and typically may result in higher interest rates. The Geoff Lee Mortgage group can help you!
How to make your commission earnings count!
Is the majority of your income derived from commission? Some of the highest paid people in Canada are commission only sales people! Commission only sales employees, like a commission real estate agent, are paid a much higher rate of commission than people on a base plus commission package and they have no ceiling on their income.
Despite this, it may be difficult to obtain a mortgage because banks are reluctant to assess their full income. However, we can help!
When applying for a home loan it is important to choose a lender that will accept 100% of your commission income rather than just 50% as is common practice with many lenders. In particular many lenders do not accept any of your income if there is any sign of inconsistency. This can occur simply because you took a holiday or because of a normal seasonal dip in sales. We know lenders that may accept 100% of your commission income, depending on your circumstances.
What do lenders think?
Canada has had many successful commission only sales people who have had trouble applying for home loans because their bank will not consider their income when assessing serviceability. Banks are cautious of relying on a commission sales person’s income because commission income is not guaranteed and can fluctuate. Of course your income can skyrocket but on the other hand the income can also be zero.
Lenders are more comfortable with those who earn a regular monthly salary. However, there are lenders that may still allow you to borrow. Call the GLM Mortgage Group or esquire online to speak to one of our expert mortgage brokers who can assist you in getting a mortgage.
Commission income is reliable!
In our experience salespeople like commission real estate agents tend to have very stable incomes and can support a loan without posing a higher risk to themselves and the lender. This is because of a few factors that many lenders don’t take into account:
- You can always work harder to earn more money.
- Nothing motivates you to succeed more than the need to meet financial commitments such as a mortgage.
- Salesmen cost a company very little to keep employed in comparison to salaried employees. As a result they are less likely to be made redundant during economic downturns.
- You know how stable your income is and you would not apply for a loan unless you are confident that you can meet the repayments.
Unlike most banks, we understand the commission remuneration is a viable source of income.
Which lenders can help?
We have access to several banks and lenders who would gladly take your commission income into account when assessing your mortgage for approval. With the huge variety and number of contacts that we have there is sure to be a lender that will suit your home loan needs.
How do lenders assess your commission income?
Lenders assess commission income in different ways and require different forms of supporting documents as evidence. Most lenders want to see a two year track record so they can be sure your income is stable. This isn’t a fair way to assess your mortgage application because a commission sales person can choose to work harder to earn more or have had their income increase as they gain more experience.
However, not all lenders take this view; contact the GLM Mortgage Group to help you get the best rate possible if you are a commission sales person.