Incorporated borrowers confuse lenders only when the file confuses itself. Paying yourself a salary produces a T4 and cleanly provable income; dividends produce T5s and a two-year averaging conversation; leaving money in the corporation produces retained earnings that some lenders will consider as a sign of strength and a few programs will count directly. The same owner, with the same real earnings, can qualify for very different amounts depending on which lender type reads the file and how the last two tax years were structured.

Photo via Wikimedia Commons.

Salary, dividends and the two-year average

Most A lenders average two years of personal income from your tax returns — salary plus dividends as declared — and want corporate financials and a notice confirming taxes are paid. A sharp recent drop needs explaining; a rising trend helps. If this year’s compensation was deliberately minimized for tax reasons, say so early: B-lender and stated-income programs exist precisely for this gap, with bigger down payment and stronger credit expected.

What to bring to the first meeting

Two years of personal T1s and Notices of Assessment, the corporate T2 and financial statements, articles of incorporation, and proof corporate taxes are not in arrears. With that package, a broker can place the file correctly the first time instead of discovering mid-offer that your chosen lender reads dividends differently.

A note on rates

Posted rates are a starting point, not the final word. Rates are sometimes negotiable depending on the person and the situation, and we work with multiple lenders who offer different products and sometimes more competitive rates than any single posted table shows. Contact us and we will shop across lenders for your file — call Travis Bannert at (780) 720-8240. Any rate quoted for your file is based on an application and lender approval — it is confirmed only when a lender reviews your full application.

Start with a check, not a guess

Run your numbers through the Pre-Approval & Refinance Check — that page is the fastest way to sign up for a review of what you qualify for, what documents you need, and what your payment would look like on the homes you are actually watching in Edmonton and across Alberta.

Frequently asked questions

Can lenders count money left inside my corporation?
Some alternative and private programs consider retained earnings or corporate net worth as supporting strength, and a few will use them more directly. Mainstream lenders generally count only what you pay yourself.

Thinking about this move in Edmonton or anywhere in Alberta? Call Travis Bannert at (780) 720-8240 — I will try to call you this week, or reply with a good time and we will set a phone appointment to walk through your file step by step.

By Travis Bannert, Mortgage Broker
Travis Bannert, Mortgage Broker | Next Door Mortgages, BFL Dominion Lending Centres | (780) 720-8240 | nextdoormortgages.com