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Contributory Income Can Help You Get a Mortgage and Purchase a Property in Canada

When it comes to purchasing a property, securing a mortgage is often a significant step in the process. In recent years, the lending landscape has expanded to include a variety of options, including A and B lenders. While A lenders adhere to stricter guidelines and qualifying criteria, B lenders provide more flexible lending solutions for individuals who may not meet the requirements of traditional lenders. One notable aspect of B lenders is their consideration of contributory income from non-title owner occupants, which can play a crucial role in increasing borrowing capacity for potential homebuyers. In this article, we will explore how contributory income can be pivotal in helping you obtain a mortgage and purchase a property in Canada.


What is Exactly Contributory Income?

Contributory income refers to the additional funds or financial support received from non-title owner-occupants of a property. In other words, it involves the income contributed by family members, relatives, or other individuals living on the property but not formally listed as co-borrowers on the mortgage application. This additional income can be instrumental in boosting the overall income assessment for the mortgage approval process.


Benefits of Contributory Income

  • Enhanced Borrowing Capacity: An increased borrowing capacity is one of the primary advantages of including contributory income in your mortgage application. When lenders consider this extra income, your total household income rises, allowing you to qualify for a larger loan amount.
  • Improved Mortgage Eligibility: Contributory income can help potential homebuyers with slightly lower individual incomes or less stable employment histories. By considering the combined financial strength of all non-title owner occupants, lenders are more likely to view the mortgage application favourably, thereby increasing the chances of mortgage approval.
  • Flexibility in Family Living Arrangements: Contributory income is especially relevant for families who choose to live together and share expenses. This option allows multiple generations to reside under one roof while contributing to household costs, making homeownership more accessible and financially viable.
  • Utilizing Part-Time Income: Contributory income is not limited to full-time employment income. Even part-time jobs or other verifiable sources of income can be considered, provided they are adequately documented and meet the lender's criteria.


Documentation and Verification

B lenders may require bank statements, pay stubs, tax returns, or other evidence of the income contributed by non-title owner-occupants. Providing transparent and accurate information will strengthen the mortgage application and facilitate a smoother approval process.

Contributory income is a valuable resource for prospective homebuyers in Canada, especially those seeking a mortgage through alternative sides. You can benefit from this product with the right approach and professional team. Connect with IK Financial today by booking your complimentary call online at ikfinancial.com and see if you qualify for this opportunity.
IK Financial Mortgage Team operates on behalf of Mortgage Edge. Lic#10680

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