The Situation
Seven months after buying a Metro Vancouver half duplex with an alternative lender, a business owner had put about $240,000 of professional renovations into it, with roughly $50,000 of unsecured debt to clear and work still to finish. The renovations had lifted the value to about $1.9 million.
The Challenge
A second mortgage behind the existing first was not doable on this file, and breaking the first mortgage to refinance elsewhere would have cost more than $30,000 in penalties on a loan seven months old, plus new fees and a repricing of the whole balance.
The Solution
We used the lender's blend-and-extend, a program it does not advertise: the existing first mortgage was increased to about $1.52 million, 80% of the new appraised value, with the old rate and the new rate blended over a fresh two-year term and no penalty, under the same stated-income program. The business's income was documented from twelve months of bank statements, in U.S. and Canadian dollars, converted at the Bank of Canada rate, and the renovation invoices were documented line by line to support the new value. The increase cleared the unsecured debt and funded the remaining work.
The Outcome
One mortgage, one payment, no penalty, and more than $30,000 kept that a break would have cost, on a home the client had turned into a forever home in seven months. When a second mortgage will not work, the first lender's own programs are sometimes the answer, and the unadvertised ones are the ones a broker has to know to ask for.