Mortgage and uber
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My wife, who does home loans and is sitting right next to me says emphatically, “YES”.. You would be treated as any self-employed applicant.... you will need to prove your last 2 years of income with 1099’s. As long as you made enough to qualify for your loan amount, she says its no issue.
We are in the U.S., so things could be different up there, but I doubt it...
We are in the U.S., so things could be different up there, but I doubt it...
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9,045 Posts
Good luck. It's considered self employment. Hope you have a good downpayment.
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7,070 Posts
Yes u can
U have 2-3 years worth of self employment?
Down payment?
6 months of bank statements
Good credit above 700 credit score
Good income
Good tds and gds
Good rate
Bad credit will be higher interest
Affordability is a factor
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2,987 Posts
The most important thing to get approved for mortgage as self-employed..
It helps to have your parent co-sign..
If you need to get approved for a higher amount.
Because after expense.. your income is so low.
Pay all your debt..
Have less credit cards..
I down my house 20%..
They were asking to close my credit card with 20k limit..
I said fine, give me a better rate..
I got -0.5% variable
Im happy with that.. when they could only do -0.2% on the first place
It helps to have your parent co-sign..
If you need to get approved for a higher amount.
Because after expense.. your income is so low.
Pay all your debt..
Have less credit cards..
I down my house 20%..
They were asking to close my credit card with 20k limit..
I said fine, give me a better rate..
I got -0.5% variable
Im happy with that.. when they could only do -0.2% on the first place
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5,611 Posts
As others have mentioned, you would be applying for such a mortgage as a self employed client. Self employed clients are likely required to show around 2 years of income depending on the type of mortgage (High Ratio vs Conventional - see below) you require. So hopefully you have reported 2 years of Uber income (2016 and 2017 tax years) to the CRA and therefore can provide proof of how much you made as per Line 150 on your income tax return.
If your down-payment is less than 20%, the mortgage will be is considered high-ratio. The requirements for approval will also be much higher, and you will be required to buy mortgage default insurance (CMHC - which will be anywhere from 0.6% to 4.5% + tax). Example: $200,000 purchase with 5% as a down-payment, means you will need to pay $9,000+tax in CMHC fees. Note that mortgage default insurance is not at all the same as home insurance. It DOES NOT protect your investment (equity in the house), it protects the Bank's investment in case you default on your mortgage payments to which your home goes into foreclosure. If the home is sold for less than the the outstanding balance on the mortgage, the Bank will be able to recoup their costs through the CMHC insurance.
And if your mortgage is high ratio:
- your monthly mortgage payment (Principal+Interest), Property taxes, Heating, plus condo fees if applicable CANNOT represent more than 32% of your income.
- your current debt (Credit Card, Bank Loans, Car Loans, etc.) cannot be higher than 40% of your current income
- the maximum amortization of the mortgage cannot be higher than 25 years
In the end, although buying a home is a good investment, you should be aware of all the requirements / fees you will be subject too. I absolutely do not recommend going at it if your only source of income is Uber. You will lose everything if you happen to get sick/injured and therefore your self-employed business can no longer generate income to meet your mortgage obligations while you are recovering.
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For the sake of argument, lets say you go into a bank today to request a pre-approval on a house you plan to make an offer on. After you submit your credit and income info, they say, that they can approve you up to a $300,000 limit with $15,000 as your down-payment from say RRSP savings.
You then make a $275,000 offer on a house that is accepted by the current owner. Here is what you'd be expected to pay:
- $15K of $275K represents a 5.4% down-payment, which means you will need to pay $11,000+tax=$12430 for CMHC (this can be added onto the mortgage)
- Your total mortgage amount is therefore $275,000 - $15,000 + 12,430 = $272,430
- With a 25 yr amortization using the current 2.5% (Prime - 1.0 5yr variable) interest rate means a monthly mortgage payment of approx $1,225/month
- Keep in mind the Closing Costs you will need to pay as one time costs (Seller's prepaid property taxes, etc)
- Property taxes you will continue to pay semi annually moving forward (my current 1000 sqft property = $3500/year in property taxes)
- You will probably want to add on some type of Mortgage insurance to protect you encase you become disabled/etc which will be an additional monthly fee added
- You will NEED home insurance (as required from the bank)
- This on top of all the other basic necessities (Hydro, Water, Maintenance of your home)
You will find that all these costs add up. You won't be able to take a break from Uber otherwise you could lose it all by defaulting on your payments. You are simply better off finding work that is a little more stable in my opinion. If you do decide to pursue a purchase of your first house, let us know how that goes. I may be able to provide you some good tips and point you into the direction of some great mortgage brokers.
Djino
"Good luck!"
If your down-payment is less than 20%, the mortgage will be is considered high-ratio. The requirements for approval will also be much higher, and you will be required to buy mortgage default insurance (CMHC - which will be anywhere from 0.6% to 4.5% + tax). Example: $200,000 purchase with 5% as a down-payment, means you will need to pay $9,000+tax in CMHC fees. Note that mortgage default insurance is not at all the same as home insurance. It DOES NOT protect your investment (equity in the house), it protects the Bank's investment in case you default on your mortgage payments to which your home goes into foreclosure. If the home is sold for less than the the outstanding balance on the mortgage, the Bank will be able to recoup their costs through the CMHC insurance.
And if your mortgage is high ratio:
- your monthly mortgage payment (Principal+Interest), Property taxes, Heating, plus condo fees if applicable CANNOT represent more than 32% of your income.
- your current debt (Credit Card, Bank Loans, Car Loans, etc.) cannot be higher than 40% of your current income
- the maximum amortization of the mortgage cannot be higher than 25 years
In the end, although buying a home is a good investment, you should be aware of all the requirements / fees you will be subject too. I absolutely do not recommend going at it if your only source of income is Uber. You will lose everything if you happen to get sick/injured and therefore your self-employed business can no longer generate income to meet your mortgage obligations while you are recovering.
---
For the sake of argument, lets say you go into a bank today to request a pre-approval on a house you plan to make an offer on. After you submit your credit and income info, they say, that they can approve you up to a $300,000 limit with $15,000 as your down-payment from say RRSP savings.
You then make a $275,000 offer on a house that is accepted by the current owner. Here is what you'd be expected to pay:
- $15K of $275K represents a 5.4% down-payment, which means you will need to pay $11,000+tax=$12430 for CMHC (this can be added onto the mortgage)
- Your total mortgage amount is therefore $275,000 - $15,000 + 12,430 = $272,430
- With a 25 yr amortization using the current 2.5% (Prime - 1.0 5yr variable) interest rate means a monthly mortgage payment of approx $1,225/month
- Keep in mind the Closing Costs you will need to pay as one time costs (Seller's prepaid property taxes, etc)
- Property taxes you will continue to pay semi annually moving forward (my current 1000 sqft property = $3500/year in property taxes)
- You will probably want to add on some type of Mortgage insurance to protect you encase you become disabled/etc which will be an additional monthly fee added
- You will NEED home insurance (as required from the bank)
- This on top of all the other basic necessities (Hydro, Water, Maintenance of your home)
You will find that all these costs add up. You won't be able to take a break from Uber otherwise you could lose it all by defaulting on your payments. You are simply better off finding work that is a little more stable in my opinion. If you do decide to pursue a purchase of your first house, let us know how that goes. I may be able to provide you some good tips and point you into the direction of some great mortgage brokers.
Djino
"Good luck!"
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The question isn’t so much whether you can get a mortgage as a full time Uber driver, but rather, whether you can earn enough doing that to make all the various payments djino mentioned above. Personally, Uber is too unpredictable in the way it does it’s business for me to depend on it as a reliable source of income.
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They'll also want to know what your rating is as well.
Thank you everyone who wrote in. Very helpful and informative and I learned a lot. Thanks again
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nope , they consider the 3000*3%= 90$ the 90$ minus your monthly capacity of payement
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Great info thanks for sharing!
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Set is calculated by why you owe on available credit. You can have a lot of high valued credit cards with little on them and it won't go against your debt ratio. Especially if they are paid off in full every month.
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Great info, thanks man!
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I can provide details surrounding the purchase of my first home. Keep in mind the mortgage rules were different then (you were allowed a 35 yr amortization, and interest rates were a bit better).
6 months after I graduated University (2011), I was making about $50K/year. Had about $30K owing in Student Loans (=$250/month) About $5K in low interest debt (=$50/month) and a $285/month Auto Lease. As Interest rates were hitting all time lows (Prime rate was 2.9%), I decided that it be a good time to stop paying rent and start looking to own my own home. I also had about $15,000 saved in RRSPs at the time.
Prior to contacting a real-estate agent, I went to Scotiabank just to see how much I would qualify for. Due to my current financial circumstances and income, they were able to pre-approve me for a mortgage up to $250,000.
I then contacted a Remax real-estate agent. After visiting about 6 different houses here in the Gatineau area over 2 days, I decided to make an offer on a home. The asking price was $189.999 for a 2 bedroom 2 bathroom Semi Detached home. I offered $183,000 (Under the condition of approved financing + Home Inspection). They countered with $187,999. I then countered with $186,500, and they accepted.
I then contacted RBC (My home bank) and they were able to get me a Prime - 0.85% (=2.15%) on a 5 yr variable. I took the 35 yr amortization and used the $15.000 I had in RRSPs as downpayment. I was charged about $5500 in CMHC fees, meant that my monthly mortgage rate was $600/month (though I have opted to pay $160 accelerated weekly payment instead as to shave off a couple of years)
Prior to the closing date (which was 90 days away), I hired a friend of mine to do the home inspection (this normal costs around $500 - I instead bought him a meal and a case of beers). Hired a lawyer (in Quebec, we call it a Notary) to close the deal (=$1000) . And paid the seller 3 months of property taxes to bring me up to date. My first year of Property taxes was about $2700/year, and it has slowly increased to the current $3500/year that I pay now. I also purchased Disability Insurance with RBC, which came to an added $50/month. My Home Insurance is about $50/month as well. Hydro is about $125/month. No Water Bill in Quebec.
That is pretty much an example of the type of fees you will be paying to finance the purchase of a home under $200,000.
djino
6 months after I graduated University (2011), I was making about $50K/year. Had about $30K owing in Student Loans (=$250/month) About $5K in low interest debt (=$50/month) and a $285/month Auto Lease. As Interest rates were hitting all time lows (Prime rate was 2.9%), I decided that it be a good time to stop paying rent and start looking to own my own home. I also had about $15,000 saved in RRSPs at the time.
Prior to contacting a real-estate agent, I went to Scotiabank just to see how much I would qualify for. Due to my current financial circumstances and income, they were able to pre-approve me for a mortgage up to $250,000.
I then contacted a Remax real-estate agent. After visiting about 6 different houses here in the Gatineau area over 2 days, I decided to make an offer on a home. The asking price was $189.999 for a 2 bedroom 2 bathroom Semi Detached home. I offered $183,000 (Under the condition of approved financing + Home Inspection). They countered with $187,999. I then countered with $186,500, and they accepted.
I then contacted RBC (My home bank) and they were able to get me a Prime - 0.85% (=2.15%) on a 5 yr variable. I took the 35 yr amortization and used the $15.000 I had in RRSPs as downpayment. I was charged about $5500 in CMHC fees, meant that my monthly mortgage rate was $600/month (though I have opted to pay $160 accelerated weekly payment instead as to shave off a couple of years)
Prior to the closing date (which was 90 days away), I hired a friend of mine to do the home inspection (this normal costs around $500 - I instead bought him a meal and a case of beers
). Hired a lawyer (in Quebec, we call it a Notary) to close the deal (=$1000) . And paid the seller 3 months of property taxes to bring me up to date. My first year of Property taxes was about $2700/year, and it has slowly increased to the current $3500/year that I pay now. I also purchased Disability Insurance with RBC, which came to an added $50/month. My Home Insurance is about $50/month as well. Hydro is about $125/month. No Water Bill in Quebec.That is pretty much an example of the type of fees you will be paying to finance the purchase of a home under $200,000.
djino
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Great and valuable information. Do you work in this field?
P
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5,611 Posts
No I don't. I work for the government. I just have a little experience in the purchase of real estate. I currently own two properties. One that I live in and a 3 unit triplex that I rent out.
Djino
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15,929 Posts
I bought my house on self employment income in 1994. (I delivered magazines and collected newspaper bills etc)
However...after mileage deductions on my schedule C I had a decent income. I don't see that on uber in many markets. So its possible, but only if you're in a market with plenty of surge and/or maybe uber Black/Select etc. Plain uberx with no surge will likely give you very little actual income after mileage.
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With the new stress test..
Yeah its too low..
You will need at least 20% down payment..
Maybe 2 co-sign.
Buying a house its not cheap..
Property taxes 4-6k
Add utilities..
Insurance..
Living cost..
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