The Situation
A year after using home equity to buy an established business, the clients carried a bank first mortgage of about $990,000 and a private second of roughly $415,000 on their Metro Vancouver home, two payments at two very different rates.
The Challenge
The business income was only a year old. A bank wanted longer; the private lender wanted its exit; and the clients wanted one payment and the private rate gone.
The Solution
We placed a new first mortgage of about $1.48 million, 80% of the home's value, with an alternative lender under its stated-income program, which reads the business's bank statements: about $1.6 million of revenue and roughly $450,000 of net income in the first twelve months, with the company debt-free. The new mortgage paid out the bank, the private second and about $31,000 of unsecured debt, on a three-year fixed term with no lender fee.
The Outcome
One mortgage, one payment, ratios under 30%, and the private lender paid out on schedule. Two business owners who were salaried employees a year earlier now hold their home on an alternative lender's pricing with a clear line of sight back to a bank.