The Situation
The clients, a married couple in Ontario with two teenagers, had a one-bedroom presale condo in Alberta completing on a fixed date in August 2024, already leased to a tenant. The year before had been hard: one client took months off during a parent's terminal illness, the other was laid off and delivered food until landing a new position in their field in June 2024. Cards were maxed, payments were late, and the credit scores read 635 and 558.
The Challenge
Those scores and a presale deadline do not meet at an alternative lender, and the part of the down payment beyond the deposits had to come from the refinance of the couple's Ontario home, closing the day before.
The Solution
We placed a private mortgage, open with no penalty, at 75% of the price including GST, about $226,000 on a one-year term at just under 10%, and sequenced the two closings so the home refinance funded one day ahead and its proceeds completed the down payment on time. The exit was written into the file: refinance with an alternative lender in about six months, once the scores had recovered and the rental had a payment history, on the stated-income program the couple already qualified for on income, with a total debt-service ratio well under 50%.
The Outcome
The presale completed on its date, the tenant's rent carries the condo, and six months later, in early 2025, it was refinanced out of the private mortgage with an alternative lender at 80% of its appraised value, with no lender fee, at a rate just over 6%; the scores had climbed to 688 and 659 by then. Bruised credit is a timing problem, not a sentence: the private mortgage held the deal, and the plan written on day one is what got the couple out of it.