Qualifying for a Mortgage when Income Has Been Affected by Covid

September 21, 2020

Talking more about your mortgage questions!

This week we answer a question that we are hearing a lot about: Can I qualify for a mortgage if my income has been affected by COVID?

We’re all living it. Some of us are more fortunate than others and have “pandemic proof” incomes.
Mortgage lenders have had to evolve and adapt their lending guidelines to accommodate the new realities of their borrowers. In this video I break down the 3 general scenarios most of our clients find themselves in.
Scenario 1 – borrowers who are employed but have reduced wages
Scenario 2 – borrowers who are temporarily laid off or furloughed
Scenario 3 – self-employed/ commissioned/ hourly workers
Give the video a watch and let me know if you have any questions relating to your specific circumstances. Myself and the Tridac team are here to help.

Below, we talk a bit more about your weekly mortgage questions!


Don’t feel like watching? Find the full transcript below!

[00:00:00] Two things I really dislike about COVID-19 are these masks and applying for a mortgage when your income has been affected.

[00:00:06] That’s better. So the question is, can you still apply for a mortgage if your income has been affected by COVID-19? And it really depends if you fit into one of three scenarios.

There are three scenarios

[00:00:18] Scenario number one, you are still employed earning a salary, but it’s been cut by a certain percentage. So, in this scenario, unless your employer can confirm a full return to your salary via letter, then the mortgage lender is going to use your reduced income. And obviously, if you’re using reduced income, it’s going to impact the maximum mortgage number that you qualify for. However, it should be noted that if we can get a letter that confirms you’re employed with the pay stub, even though it’s a reduced amount, we can still apply for a mortgage.

[00:00:53] Scenario number two, in this scenario, you’ve been laid off or placed on Furlough where you’re no longer earning income. And this is a major problem for mortgage lenders. So it’s very unlikely that you’re going to have success applying for a mortgage under this scenario. However, the good news is the moment you return back to work with just one pay stub in hand, we can use your full salary to apply for a mortgage.

It’s a bit more tricky if you’re self-employed

[00:01:18] Finally, scenario number three, this is for those of you who are self-employed or rely on commissions or variable income to qualify for your mortgage. Obviously, some of us who are self-employed have been affected by COVID. And so what the lender’s going to focus on is a very pragmatic approach. They’re going to look at your two years of history. So still relying on your tax returns for the last two years and then they’re going to want to establish that in 2020 during the pandemic that you’ve managed to keep cash flow continuous or that you’ve re-established that cash flow. So, they’re going to ask you for things like invoices, contracts, bank statements to confirm that cash is still flowing in the way it was pre-COVID.

[00:02:02] Listen, guys, I really hope that today’s video really helped you out to understand what options there are. If you want to discuss further how COVID is impacting your mortgage application. I invite you to reach out. My name is Chris. I’m the principal broker and owner of Tridac Mortgage. I love to talk with you about your mortgage. Be well, bye for now.

Helping you find answers for your mortgage matters!

I’m dedicated to improving my client’s financial literacy and solving hard money problems. Get in touch with confidence. Book a call directly via my calendar below, or you can get in touch with me here.


Christopher Molder

Mortgage Broker

Christopher is a mortgage broker based in Toronto, Canada. And a son of a broker too. He’s a second generation mortgage broker. Following in his father’s steps he joined the family mortgage business straight out of university.