The Situation
The clients immigrated to Canada in the late 1990s as a physician and a veterinarian, retook their courses and exams, and were licensed here within a few years. Each ran a successful clinic in Metro Vancouver for about ten years. In 2014 they moved to the United States for work and have practised there since, keeping the family home and renting it to a long-term tenant for about $6,000 a month. Both have credit scores above 850 and no missed payment on record.
The Challenge
Every dollar of employment income was earned and taxed in the United States, filed jointly in U.S. dollars, with no Canadian T4 or T1 to show a lender. The home was now a rental rather than a residence, which changes how a lender treats it. And the refinance had three jobs at once: a better rate on the existing mortgage, a $300,000 line of credit to clear, and about $325,000 toward a $725,000 townhouse for the younger child, with the clients putting roughly $400,000 of their own savings into that purchase.
The Solution
We documented the income from two years of U.S. tax returns, converted at the Bank of Canada rate, and qualified the residential mortgage at the benchmark rate the way a Canadian lender tests any file. The property's rent was counted as income with the usual lender allowance. At about $1.8 million on a home worth roughly $5 million, the loan-to-value was 36%, and a major bank, a prime lender, read the cross-border income as what it was: more than $440,000 a year from two licensed professionals with a twenty-year record of paying every account on time.
The Outcome
The refinance closed at about 36% loan-to-value on a 25-year amortization. The line of credit was paid off, the mortgage rate came down, and the equity released covered the balance of the townhouse where the younger child lives while studying in BC. The clients kept a $5 million asset in Metro Vancouver, kept their tenant, and put part of twenty years of equity to work for the next generation without selling anything.