Clients had done a pre-sale condo a few years ago with 15% down payment. The condo was set to close in a month and they did not have financing in place. Their business had good cash flow, however they did not claim much income personally. Two banks declined them, along with two other brokers.
They were able to put as much as 35% down, if required, but that would have taken funds out of their working capital. Blake was able to get financing approved with “A” rates in less than 24 hours with only 20% down payment.
Investment Property Owners:
Clients were partners owning rental properties and both were self-employed, with incomes ranging on their CRA Notice of Assessments from the past two years and they didn’t qualify with a standard lender.
They had done significant improvements to one of their properties and were looking to take some of the equity back out. The broker they had been dealing with for the past 5 years was only able to get them 65% loan to value on the refinance, which wasn’t as much as they had hoped and left them short on paying off some other items.
Blake had two other lenders approve the deal at 75% and 70% loan to value, but the rates were slightly higher. Blake had them have the other broker cancel the deal with the lender he was using and went back to the same lender, and due to his knowledge of their products was able to get them approved at 75% loan to value with a lower rate and also saving them a 1% fee.
Commercial Builder looking to take out equity to invest in his business:
A builder, who previously had invested his own personal cash or taken a variable rate mortgage on his primary residence when required to loan to his company while building other projects, approached Blake looking for a variable rate mortgage. He also had low personal income, which was limiting the mortgage amount he could qualify for, but he had high net worth.
Blake assessed his needs and the ideal solution based on all of the lenders he dealt with was a high net worth product that allowed the use of an All-In-One solution. This gave the client access to 175% of the capital he would have qualified for with his own bank and also allowed him to make interest only payments on the monies borrowed – which he could completely write off and have his company pay for.
The client was very happy with the result as he no longer was required to make principle payments personally, while the money was loaned. He could also advance and re-advance (on the principle that was repaid) when required, instead of getting a large lump sum of money and having payments start right away.
Clients looking to make a major renovation which would almost double the value of their home:
Clients were in a situation where they wanted a larger and newer house, but they loved the area they lived in and their neighbours. They had spoken to their current bank about the idea of a major renovation and, despite being very well qualified from an income perspective, they were having issues putting the financing together.
Blake was able to get them financing to complete the construction of the home to their specifications. During the construction however, the clients decided to make some additional customizations which resulted in increased costs in some areas, while not completing some items that were supposed to be done in the initial deal. This resulted in an issue with the initial financing that was in place due to a combination of the appraiser and the lender. Blake found a new lender and appraiser and was able to put together take-out financing that allowed them to pay the initial mortgage, the builder and their line of credit – all while getting a great rate.
Commission Client with a holding company:
Client made significant income but most of the revenue was kept in his company for tax reasons. The income he did take was received and split with his wife as dividends. They decided they wanted to move to a new area and to get the home they were looking for, the purchase price was over $1 million dollars. The income they were claiming did not support this and the client also had a very large lease payment.
Blake was able to come up with a financing solution that only required them to put 25% down (which was all they could afford) and get financing through an alternative lender at a reasonable rate. They went with a short term financing deal and have plans to be able to re-finance next year after they re-work their income planning with their accountant to support their new lifestyle and higher expenses.
The information contained in this website is intended to provide general guidelines only. The application and impact of the law can vary widely from case to case based on the specific or unique facts involved. Accordingly, the information in articles are not intended to serve as legal, accounting or tax advice. Users are encouraged to consult with their professional advisers for advice concerning specific matters before making a decision.
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J. Paul Wilson,CFP®, ChFC®
Certified Financial Planner
27 Blue Thistle Road Halifax, Nova Scotia, B3S 1M3