Why Self-Employed Individuals Should Avoid Going Directly to the Bank for Their Mortgage

Josh Perez • April 22, 2025

As a self-employed business owner, getting approved for a mortgage can feel like an uphill battle. If you’ve been heading straight to the bank for help, it’s time to rethink that approach. There are two main reasons why this could be a bad idea: the people you’re dealing with and the products they offer. Let’s break down why these two factors can cause problems for self-employed individuals seeking a mortgage.


The People: Lack of Expertise

There’s a growing trend in banks today, one that’s getting worse with every passing year: more and more bank employees are lacking the necessary experience in financial planning, particularly when it comes to understanding business owners. This leads to a crucial misunderstanding of how businesses operate, which can directly impact the approval process for a mortgage.


When you go to the bank, the person you’re dealing with may not ask the right questions or dive deep enough into your business’s financial health. They might focus too heavily on what you personally take out of your business, instead of getting a full picture of how your business operates and its potential for growth. The lack of this understanding means your mortgage application could be misjudged, leaving you without the approval or terms you need.


The Products: Not Designed for Business Owners

The second issue is the products that most banks offer to business owners. Traditional bank products often base their qualification process on the personal income a business owner takes out of their business. For many entrepreneurs, this creates a problem because it’s often in their best interest to leave more money within the business rather than withdrawing it personally. This is especially true when trying to grow a business sustainably.


By focusing solely on personal income, banks miss a huge part of the picture. A business owner’s true financial strength is not just in the salary they pay themselves, but in the overall health and future potential of their business. When banks ignore this, they miss opportunities to offer better mortgage products that take into account the business’s long-term financial viability.


The Alternative: Working with a Mortgage Broker

As a mortgage broker, my role is to work with a wide variety of lenders who take a common-sense approach to self-employed business owners. Instead of just looking at personal income, we dive deep into the overall financial health of the business itself. This involves looking at how the business operates, understanding its financial structure, and making sure that your business’s potential for growth is properly recognized.


One of the biggest benefits of being a business owner is the ability to retain earnings within the company. By doing this, you can avoid the highest personal tax rates and use the extra funds to grow your business sustainably. But when you go directly to a bank, they might penalize you for not taking out large amounts personally. A mortgage broker, however, can work with you to ensure that your business’s growth strategy is taken into account, helping you secure a mortgage that fits your long-term goals.



In Conclusion

If you’re self-employed and you’re planning to get a mortgage, it’s time to stop going directly to the bank. Instead, work with a mortgage broker who understands the unique needs of business owners. A mortgage broker will help you navigate the complexities of self-employment and find mortgage products that are more in line with your business’s health and future potential. Don’t let banks’ limited understanding of your financial situation stand in the way of your homeownership goals. Take the smart route and get the right support to secure a mortgage that works for you and your business.

"Most bank products lean on what a business owner takes out personally of their business and base their qualifying on that number. Whereas in most cases, it's prudent to keep more money in the business so that it can grow and become more profitable."

Josh Perez
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New to Credit? Let’s Build a Solid Foundation

By Josh Perez • September 24, 2025
Starting from Scratch: How to Build Credit the Smart Way If you're just beginning your personal finance journey and wondering how to build credit from the ground up, you're not alone. Many people find themselves stuck in the classic credit paradox: you need credit to build a credit history, but you can’t get credit without already having one. So, how do you break in? Let’s walk through the basics—step by step. Credit Building Isn’t Instant—Start Now First, understand this: building good credit is a marathon, not a sprint. For those planning to apply for a mortgage in the future, lenders typically want to see at least two active credit accounts (credit cards, personal loans, or lines of credit), each with a limit of $2,500 or more , and reporting positively for at least two years . If that sounds like a lot—it is. But everyone has to start somewhere, and the best time to begin is now. Step 1: Start with a Secured Credit Card When you're new to credit, traditional lenders often say “no” simply because there’s nothing in your file. That’s where a secured credit card comes in. Here’s how it works: You provide a deposit—say, $1,000—and that becomes your credit limit. Use the card for everyday purchases (groceries, phone bill, streaming services). Pay the balance off in full each month. Your activity is reported to the credit bureaus, and after a few months of on-time payments, you begin to establish a credit score. ✅ Pro tip: Before you apply, ask if the lender reports to both Equifax and TransUnion . If they don’t, your credit-building efforts won’t be reflected where it counts. Step 2: Move Toward an Unsecured Trade Line Once you’ve got a few months of solid payment history, you can apply for an unsecured credit card or a small personal loan. A car loan could also serve as a second trade line. Again, make sure the account reports to both credit bureaus, and always pay on time. At this point, your focus should be consistency and patience. Avoid maxing out your credit, and keep your utilization under 30% of your available limit. What If You Need a Mortgage Before Your Credit Is Ready? If homeownership is on the horizon but your credit history isn’t quite there yet, don’t panic. You still have a few options. One path is to apply with a co-signer —someone with strong credit and income who is willing to share the responsibility. The mortgage will be based on their credit profile, but your name will also be on the loan, helping you build a record of mortgage payments. Ideally, when the term is up and your credit has matured, you can refinance and qualify on your own. Start with a Plan—Stick to It Building credit may take a couple of years, but it all starts with a plan—and the right guidance. Whether you're figuring out your first steps or getting mortgage-ready, we’re here to help. Need advice on credit, mortgage options, or how to get started? Let’s talk.

Bank of Canada Rate Announcement Sept 17th, 2025

By Josh Perez • September 17, 2025
Bank of Canada lowers policy rate to 2½%.  FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario September 17, 2025 The Bank of Canada today reduced its target for the overnight rate by 25 basis points to 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2.45%. After remaining resilient to sharply higher US tariffs and ongoing uncertainty, global economic growth is showing signs of slowing. In the United States, business investment has been strong but consumers are cautious and employment gains have slowed. US inflation has picked up in recent months as businesses appear to be passing on some tariff costs to consumer prices. Growth in the euro area has moderated as US tariffs affect trade. China’s economy held up in the first half of the year but growth appears to be softening as investment weakens. Global oil prices are close to their levels assumed in the July Monetary Policy Report (MPR). Financial conditions have eased further, with higher equity prices and lower bond yields. Canada’s exchange rate has been stable relative to the US dollar. Canada’s GDP declined by about 1½% in the second quarter, as expected, with tariffs and trade uncertainty weighing heavily on economic activity. Exports fell by 27% in the second quarter, a sharp reversal from first-quarter gains when companies were rushing orders to get ahead of tariffs. Business investment also declined in the second quarter. Consumption and housing activity both grew at a healthy pace. In the months ahead, slow population growth and the weakness in the labour market will likely weigh on household spending. Employment has declined in the past two months since the Bank’s July MPR was published. Job losses have largely been concentrated in trade-sensitive sectors, while employment growth in the rest of the economy has slowed, reflecting weak hiring intentions. The unemployment rate has moved up since March, hitting 7.1% in August, and wage growth has continued to ease. CPI inflation was 1.9% in August, the same as at the time of the July MPR. Excluding taxes, inflation was 2.4%. Preferred measures of core inflation have been around 3% in recent months, but on a monthly basis the upward momentum seen earlier this year has dissipated. A broader range of indicators, including alternative measures of core inflation and the distribution of price changes across CPI components, continue to suggest underlying inflation is running around 2½%. The federal government’s recent decision to remove most retaliatory tariffs on imported goods from the US will mean less upward pressure on the prices of these goods going forward. With a weaker economy and less upside risk to inflation, Governing Council judged that a reduction in the policy rate was appropriate to better balance the risks. Looking ahead, the disruptive effects of shifts in trade will continue to add costs even as they weigh on economic activity. Governing Council is proceeding carefully, with particular attention to the risks and uncertainties. Governing Council will be assessing how exports evolve in the face of US tariffs and changing trade relationships; how much this spills over into business investment, employment, and household spending; how the cost effects of trade disruptions and reconfigured supply chains are passed on to consumer prices; and how inflation expectations evolve. The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. We will support economic growth while ensuring inflation remains well controlled. Information note The next scheduled date for announcing the overnight rate target is October 29, 2025. The Bank’s October Monetary Policy Report will be released at the same time.