Mortgages for recently incorporated owners with less than 2 years of history

Many lenders want to see two years of self-employed income before they'll rely on it. For someone who incorporated last spring, that can sound like a door closing. Often it's more of a question: two years of what?

A new company is not always a new business

Owners often incorporate a business that already exists. A sole proprietor1 who has reported business income on a T1 for five years and then incorporates hasn't started over, even though the corporation's first T2 is only months old.

Incorporating can make an established business look new on paper. The history often still exists. It just sits in different documents.

Some lenders will read the earlier personal returns alongside the new corporate ones. How much weight they give that history varies. Continuity helps: the same work, the same clients and the same industry.

When the business really is new

If you've moved from employment to running your own company, the question shifts. Some lenders look at whether you're doing the same work you were employed to do, and for how long. A salaried engineer who now consults through a corporation is a different file from someone starting in a new field.

There can be paths with less than two years of history. They tend to come with trade-offs, such as a larger down payment, a different lender category or a rate premium. Sometimes the better decision is to wait for the next tax year to be filed. That is a choice worth making on purpose, not by default.

• How long you've done this kind of work, not only how long the company has existed
• Whether earlier self-employed income is on your personal returns
• What you pay yourself now, and how it's documented
• Whether the next filed year would change the picture enough to wait

How to pay yourself in the first years is a question for your accountant. Our part is showing how each choice is likely to read to a lender, so the two conversations happen together rather than after the fact.