The Situation
The client runs a framing and drywall company that has operated for more than six years. A consumer proposal, which included CRA debt and one credit card, was discharged in early 2022. At that point no bank or alternative lender would write the file, so the family home in the Fraser Valley, worth about $1.3 million, was financed privately at roughly $926,000. Every payment since had been made on time, and a new credit card had been added and kept perfect.
The Challenge
A consumer proposal stays on the bureau for years after discharge, and the score, at 651, still carried it. The private mortgage cost close to 10%, and a private lender does not want to be the long-term lender. The business was strong, grossing about $967,000 a year, but the client had never declared enough personal income to qualify under a regular program; on the tax return alone, no lender would write a $1 million mortgage.
The Solution
Alternative lenders will consider a file two years after a proposal is discharged if the payments since have been clean, and their stated-income programs qualify on the corporation's income rather than the personal return. Twelve months of business bank statements, about $967,000 of deposits less roughly $500,000 of expenses, gave a net income near $467,000, and the debt-service ratio came in near 21%. The new first mortgage of about $1.04 million, 80% of value on a one-year closed term, paid out the private lender and the remaining debt at a rate under 5%.
The Outcome
From close to 10% to under 5% with the proposal still on record: the private mortgage is gone, the family keeps the home, and the one-year term lets the file move again as the proposal ages off the bureau. A proposal does not end a borrower's options; it sets a timeline, and this file followed it: private at discharge, alternative at two years, a bank next.