Now you can listen to our blog post, "Loans While On Employment Insurance Benefits" while…
Now you can listen to our blog, “Get Mortgage Approval Using Uber & Lift income in Canada” while on the go.
“To qualify for a mortgage, you must demonstrate that your income is consistent and sufficient to cover both your new mortgage and your old debts.”
This leads us to one question: Is it possible to buy a house using Uber & Lift income in Canada?
The short answer is Yes, you can buy a house with your Uber earnings and acquire a mortgage with 100% of your Uber earnings. This is because you are self-employed as an Uber driver.
Continue reading to know the conditions involved and how you can get mortgage approval on Uber or Lift income.
You probably already know that It’s not easy to make ends meet in today’s challenging housing market. City people can earn money through technological businesses like Uber. For some, this additional income would be used to supplement their savings and pay obligations. Others may work full-time for Uber to supplement their income. Also, Uber’s revenue is seen differently by the country’s largest prime lenders than typical T4 work income.
But, no matter the case, Uber earnings can be used to pay your mortgage in Canada. Let’s dig this deep to find how it is possible.
Yes, as an Uber driver, you can get a mortgage. To secure a mortgage as a self-employed Uber driver, you must have Uber revenue for two years. You are considered a self-employed worker or contractor if you operate as an Uber driver. It immediately qualifies you for a self-employed mortgage. Prime lenders prefer to take on as little risk as possible when it comes to mortgage funding. They have separate rules in place for self-employed candidates to ensure this.
As an Uber driver, looking for a mortgage, you’ll need the following documents:
- Assessments revealing Uber income have been on the books for two years.
- Uber’s employment history spans two years (T2125 Tax Slips)
You must show Uber income on two years’ worth of tax documents if you want to buy a house.
A lender will use the average of two years’ worth of Uber earnings. If their salary in the second year is higher than in the first, there may be potential to convince them to use a larger income. It, however, is not always the case. For confirmation, you should consult with a licenced mortgage broker.
What if I’ve only been driving for a few years?
If you’ve been driving for Uber for less than two years, your salary won’t be counted against your mortgage qualification. A quality lender, such as a large bank, will want two years of self-employment history with Uber to demonstrate consistency and longevity.
So you’re suggesting that if I’ve been driving for less than two years, my Uber earnings won’t count against my mortgage? There is, however, some good news.
Using Uber Earnings to Make a Bigger Down Payment
If your Uber revenue isn’t considered income for mortgage purposes, the actual earnings you’ve made will allow you to make a greater down payment on your home. Greater down payment will assist you in repaying your debts and will limit what you can purchase. Essentially, you’ll be able to buy a little bigger property with your Uber earnings since you’ll be able to put down a higher down payment.
A greater down payment might come from various places, and lenders will always want proof that it isn’t coming from another line of credit. There is some leeway if you can show them that you’ve been working as a part-time or full-time Uber driver.
Keep in mind that Uber is primarily touted as a part-time way to supplement your income. They are continually promoting marketing that supports the concept of “work on your schedule.” Kudos to you if you can convince the bank that your timetable idea is a full-time job!
Is it possible to get a mortgage based on Uber income?
Fortunately, some lenders specialise in self-employed, Uber, and ridesharing income mortgages. As a house buyer, you should also keep in mind that there are various types of lenders on the market that offer mortgages. Among the most common sorts of lenders are:
- Banks are prime/direct lenders.
- B Lenders / Subprime Lenders
- Non-Bank Financial Institutions (Non-Bank Financial Institutions)
- Hard Money Lenders / Private Lenders
You can always get accepted for a mortgage with Uber income, thanks to the several mortgage lenders on the market. You will, however, have to bear additional fees. Upfront expenses, registration fees, and higher interest payments are examples of these additional costs.
These second-tier lenders will frequently take into account your recent Uber earnings. They don’t need to see two years’ worth of proof of income. These alternative lenders may charge a higher interest rate or need a greater down payment due to the lower barrier to entry into the mortgage industry. The basic line is that you can acquire a mortgage and buy a property as an Uber driver.
Uber Income’s Popularity Among Canadian Lenders
According to Money Sense, 90,000 Canadians work as Uber drivers. More mortgage applications now contain Uber revenue due to the growing popularity of this kind of income.
Given this form of income volatility, most lenders will be hesitant to classify it as T4 revenue. After all, Uber drivers account for only 0.2394 per cent of Canadians. If we consider all sorts of ridesharing and food delivery income, we could be talking about 1% of the population.
Mortgage brokers specialise in several aspects of the loan industry. Look for a broker who specialises in working with self-employed people. They will be able to steer your mortgage application to lenders who are more receptive to T2125 income applicants. Hopefully, in the future, using Uber money to purchase a home in Canada will be easier.
Find out when you can start paying for a newly built home if you buy it from the builder. You can put your Uber earnings toward a property loan and only begin making payments once the house is sold.
You May Also Like: Used Car Financing in Canada
The Bottom Line
If you’re currently employed as an Uber driver or a food delivery driver, you’ll need to figure out how much extra income you want to bring in each year to cover your mortgage payments. Once you’ve completed this, you’ll need to work on it for at least two years and be as consistent as possible. If your second-year salary is higher than the first, it demonstrates to your lender that you have a reliable source of income.
At Lionsgate, we specialize in helping people obtain funding private mortgages for land purchases as well as for other real estate transactions. If you are looking to buy land in Canada, get a mortgage or apply for a loan, leave us a message and we will try to connect you with local realtors and sourcing for financing.
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