The Situation
The clients, a married couple in Metro Vancouver, own a two-bedroom downtown condo worth about $850,000 with a bank mortgage of only about $92,000 left on it, and one client's parents still on the title and the mortgage from the original purchase. One client has taught in a school district for about 20 years at about $99,600; the other had recently moved into a municipal planning role at about $62,300 after a stretch in architecture and at home with family.
The Challenge
The couple wanted three things at once: their high-rate cards and unsecured lines consolidated, a deposit for a rental property purchase, and the parents released from the title. One credit file carried a collection being paid off, with a score of 625 against the other's 684, and a bank line against the condo would have meant requalifying the parents or breaking the small first mortgage separately.
The Solution
In 2023 we placed an alternative lender's equity line of credit of about $250,000 at about 8%, open, which paid out the small bank mortgage so the line stood alone on title at 29% loan-to-value. The consumer debt was cleared from the first draw, the rest sat available for the rental deposit, and the parents came off title and off the borrowing in the same transaction. The file qualified on the two salaries at a 19% debt-service ratio.
The Outcome
One open line in place of a mortgage and a stack of cards, the deposit for the next property ready to draw, and the parents released from a debt that was never theirs. An equity line at this loan-to-value is cheap flexibility; it only has to be set up before the rental purchase, not after.