Mortgages for incorporated physicians

Short answer: once you incorporate, a lender sees the salary and dividends you pay yourself, not your practice's full earnings. Money you leave in the corporation can make you look like a smaller earner. Lenders that understand professional corporations can account for it, so the lender you choose matters.

How incorporation changes what a lender sees

• Salary appears on a T4 and is read like employment income.
• Dividends appear on your personal return. Some lenders gross them up to reflect the corporate tax already paid; others do not.
• Retained earnings stay in the corporation and do not appear on your personal return at all, unless a lender chooses to look at your corporate statements.

Timing: before or after you incorporate

In your first years of practice, a medical professional program can qualify you on projected income regardless of how you are paid. Once you leave that window, lenders rely on your tax returns. If you plan to buy soon after incorporating, talk to us before you set your salary and dividend mix for the year.

What to have ready

• Two years of personal tax returns and notices of assessment
• Two years of corporate financial statements, and your T2 returns if requested
• Articles of incorporation and your share structure
• Your billing or contract summary, and any practice loans

Questions to ask any lender

1. Do you gross up dividends from a professional corporation?
2. Will you consider retained earnings, and how much of them?
3. How do you treat practice or equipment loans held by the corporation?