Renting Your Space Let A Dominion Mortgage Broker Explain Suite Income And How It Can Qualify You For A Mortgage
Secondary rental suites, like basement apartments, have always been a popular way to subsidize the cost of purchasing a home. But did you know that you can now use 100 percent of the income from a rental suite to qualify for a mortgage? Canada's largest default insurer, the Canadian Mortgage and Housing Corporation (CMHC) has made it easier for lower-income Canadians to purchase single-family homes in residential neighbourhoods by allowing suite income to be considered when assessing their ability to pay a home loan. Here's what you need to know about including suite income in your mortgage application.
What Types of Rental Units Qualify?
A Dominion mortgage broker can only include suite mortgage in your lending application if there is only one rental unit and the property is owner-occupied. Examples of such properties are a single-family home with a basement apartment and a duplex. The rental unit must be a legal unit, meaning it is self-contained with a separate entrance and complies with local bylaws. If you're unsure whether your rental suite is legal, your Dominion mortgage broker can help you determine whether the unit conforms to municipal zoning regulations.
What Information is Required?
For existing rental suites, lenders will want to see a two-year record of rental income. This will help them determine how much income to add to your other sources of income (i.e. salary, commission income, bonuses, alimony, child support). If the unit is new, your Dominion mortgage broker will submit a market rent appraisal which, if accepted, will add the estimated rental income to your application. Speak with your Dominion mortgage broker about what type of rental income documentation you'll need to provide to lenders.
The supplemental income from a rental suite can mean the difference between settling with a property in a less desirable area and being able to afford a home in the neighborhood of your dreams. Contact a Dominion mortgage broker today for more information about including suite income in your mortgage application.Request Mortgage Info