Business for Self - Simplified!

A good portion of the working public is self-employed.  I believe this will continue to be a substantial part of the population and may be even greater in years to follow.   It is a segment of our working population that was not handled very well by our financial institutions, up until the last few years. 

The insurance providers, CMHC, Genworth, and Canada Guaranty have a program called Business for Self Simplified.  There are small differences between the different insurers, but I want to speak of one common element:  The insurer requires you be self-employed for a minimum of two years. So, if and when you decide to start your own business, first go to the Chamber of Commerce and complete an application for a Business License.  You can register your personal name if you haven’t decided on your company name.  The license lasts for seven years, costs about $75.00, and provides solid proof of when you started in business.  If you don’t have a one page license, then the documentation you are required to provide is substantially harder to get.  As a self-employed person make buying a home easier.

One final note: You require great credit to qualify as well.  Get a business license, tend to your debt properly, and your chance of buying a home becomes a real possibility.

Credit Saga

I believe I could blog almost every week about credit horror stories because they happen so frequently.  This week is no different.  I was recently asked by a bank employee to investigate if she could secure a mortgage.  She had been bankrupt a year ago and had a recent marital split.  Her bank employer would not approve her, even though she had worked for this bank for over 20 years. 

As a broker, I have lenders that will consider a situation like this. So, I took her application and drew a credit bureau.  Sure enough, she was three months from the end of the period where the bankruptcy shows on a credit bureau.  After a bankruptcy, a person must have perfect credit behaviour—that means no late payments, excessive use of credit or too many inquiries.  In her case none of this occurred, yet her rating was low.  After looking into it, we found out her ex-spouse had ordered a credit card and she was on his application.  She never knew about the card and he failed to make payments.   It was considered written off on her bureau too, which is why her score was so low. 

I thought initially I could easily help—now, it is going to involve hard work to get her over this hurdle and get her approved.