How to qualify for a mortgage when your current income doesn’t cut it

financialpost.com:

It’s a common tale across Canada.

People see rates coming down; they want to buy a home — perhaps because they don’t think prices will stay down for long — but they can’t prove enough income to get a mortgage.

What to do? Well, unless you’re a new professional like a doctor or dentist, or you qualify for rigid niche lending programs, or you can get approved based on a significant net worth, major banks will likely show you the door.

Fortunately, big banks don’t completely monopolize Canada’s mortgage market. Alternative lenders will often lend you more based on your overall ability to pay. And that ability doesn’t just rest on your income today.

Here are four ways non-Big-Six-Bank lenders can qualify you when your current income doesn’t cut it.

Family members often chip in on bills — think of grandma living in the guest room or your folks in an in-law suite. These family members may not be on title to the property, but alternative lenders will consider their payments when helping you qualify for a mortgage.

Some lenders will also include well-documented part-time or gig income (handyman, Uber driver, etc.) without demanding the usual two-year income history.

“Canadians are great at finding creative ways to earn more money for their family,” says Grant Armstrong, head of mortgage originations at Questrade Financial Group’s Community Trust Company. “As a lender in these cases, we’re looking for reasonable income that shows a consistent pattern and can be documented for the last three, six, nine or 12 months.”

For some borrowers with new cash businesses on the side, bank statements or reference letters might be all the documentation needed. Try getting that approved at a big bank, especially if you have a lower credit