Sarah, a self-employed graphic designer in Toronto, has been operating her business for 18 months. Her notice of assessment (NOA) for last year shows a net income of $55,000, but she can demonstrate consistent gross deposits of $120,000 for the past year. She is seeking a mortgage to purchase a $700,000 condo with a 10% down payment. Which of the following is the most likely outcome regarding her mortgage application?

Question: Sarah, a self-employed graphic designer in Toronto, has been operating her business for 18 months. Her notice of assessment (NOA) for last year shows a net income of $55,000, but she can demonstrate consistent gross deposits of $120,000 for the past year. She is seeking a mortgage to purchase a $700,000 condo with a 10% down payment. Which of the following is the most likely outcome regarding her mortgage application?

Answer options: ✅ She may qualify for a stated income program through a provincially regulated lender, subject to her overall credit and financial position.

• She will not qualify for any mortgage until she has a minimum of two years of NOA history demonstrating stable income.
• She will only qualify for a mortgage if she can obtain default insurance, which requires using her NOA income.
• She must transition to a salaried position for at least six months before being considered for a mortgage.

Correct answer: She may qualify for a stated income program through a provincially regulated lender, subject to her overall credit and financial position.

Explanation: Provincially regulated lenders, such as credit unions and some monoline mortgage lenders, often offer stated income programs for self-employed individuals with less than two years' history or who have robust gross revenue but low net income, provided other criteria are met.