The Situation
The same couple had bought a two-bedroom presale condo in Metro Vancouver four years earlier. By the time the building completed in January 2024 they had bought the home they intended to live in, and at the walk-through they decided to sell the new condo rather than move in.
The Challenge
A presale contract has to complete on the builder's date or the deposits, about $159,000 here, are at risk. The couple could not service a second mortgage on top of the home they had just bought, with one income newly self-employed, and the alternative lender's approval we held for the presale could not survive a second purchase; we cancelled it ourselves rather than leave the lender uninformed.
The Solution
We placed an open private mortgage at 75% of the purchase price including GST, about $620,000, on a one-year term at a rate in the 10 to 11% range, with the deposits already paid counting as most of the 25% down and savings covering the rest. Open means no penalty on payout, which is the only term that makes sense for a property being sold.
The Outcome
The condo completed on the builder's date, was listed, and sold in April 2024, about three months later; the private mortgage was paid out from the sale with no penalty, and the surplus went to pay down the mortgage on the home the couple kept.