The Situation
The clients, a married couple in Metro Vancouver with a young child, needed to refinance their four-bedroom townhouse, worth about $950,000, for three reasons at once: pay out the first mortgage of about $558,000, clear about $106,000 of unsecured debt plus $10,000 owed to a friend, and change the title, removing a 1% covenantor added years earlier and adding the spouse who was not on it. One client, a project engineer with 15 years in the industry, had been laid off in early 2022 and spent six months finding the next position at about $107,000; the other runs a small cleaning business that COVID had set back.
The Challenge
The debts had gone to a collection agency that was pressing for payment, both credit files showed written-off accounts and over-limit balances, with scores of 520 and 618, and the household's ratios on paper ran to 55%. The title change meant a new mortgage was unavoidable, and it had to close fast.
The Solution
We refinanced with an alternative lender under its stated-income program at 75% of value, about $712,500 on a three-year fixed term at about 6.7% with a 30-year amortization: the engineer's salary on a letter of employment and pay stubs, the cleaning business's income from twelve months of bank statements, and the new title registered with the spouse on and the covenantor off. The proceeds paid out the first mortgage, every collection and the loan from the friend, and the file was closed quickly to stop the collection agency's clock.
The Outcome
Collections gone, title corrected, one mortgage, and a credit file that can rebuild from a clean position. A layoff, a collection agency and a title problem arriving together is exactly the file a bank declines and an alternative lender, properly documented, funds.