The Situation
A business owner who has run an oilfield trucking company in Alberta since 2011, with revenue near $1.2 million a year, had rented for years after a divorce and wanted to buy a 2021-built house in Alberta for about $567,500 with just over 5% down.
The Challenge
Self-employed income paid as a mix of T4 and T5, child support of $1,300 a month, and one isolated late payment on the bureau from working in an area with no internet access. An insured purchase at 94% loan-to-value leaves a lender no equity cushion, so the income and the explanation had to be exact.
The Solution
We placed the residential mortgage with a major bank, a prime lender, as an insured purchase: the lower of the two years' T4 and T5 income, about $155,000, was used so no exception was needed, the child support was carried as a liability, the late payment was explained in writing, and because the client had not owned a home in more than six years the file qualified as a first-time buyer for a 30-year insured amortization. Approved at about $536,000 plus the insurance premium, on a five-year variable rate with a discount.
The Outcome
The client owns a home near the business after years of renting, with about $31,750 down from savings and bank pricing on an insured mortgage. Self-employed does not mean 20% down: with two years of corporate income on record and a clean explanation for the one blemish, an insured bank mortgage was the right fit.