The Situation
An incorporated dentist in Metro Vancouver, eleven years in practice, wanted about $300,000 of home equity for investment purposes. The home was worth roughly $1.8 million and carried a bank first mortgage of about $785,000 on terms worth keeping.
The Challenge
A refinance would have broken that mortgage, with a penalty and a repricing of the whole balance. A private second mortgage would have cost double-digit interest on money meant for investing.
The Solution
We placed a residential second mortgage with the same major bank, a prime lender, behind its own first mortgage, leaving the original loan untouched. Income was qualified on two years of T4s from the professional corporation, grossed up as the lender's program allows for incorporated professionals, and the combined loan-to-value stayed near 61%.
The Outcome
About $300,000 released on a 30-year amortization at bank pricing, the first mortgage intact, no penalty, and the client's credit and equity position preserved.