The Situation
The clients, a common-law couple in Metro Vancouver, had bought their current home in December 2023 on an open private mortgage of about $554,000, secured inter alia against a family home, and completed a presale condo a month later on a second private mortgage, having decided to sell it. The presale sold in April 2024. One client runs an incorporated transportation business started in late 2021 after three decades with one company; the other had been laid off in January 2024 after 26 years with one employer and was looking for work. They held about $343,000 in RRSPs and savings, carried roughly $70,000 of consumer debt, and their credit scores read 679 and 838.
The Challenge
On the last twelve months of bank statements the company showed only about $40,000 of deposits; the contract that changed everything, $9,100 a month plus GST with the company's main client, had started on April 1 and had produced one payment. One household income had just stopped. With the private mortgage at over 10% and the family home still tied up as security, the couple needed a lender that would read where the income was going rather than where it had been.
The Solution
We refinanced the home with an alternative lender under its stated-income program with a self-employed contract component: the bank statements were taken as the first source of income and the signed contract, valid to 2029, as the second, with 10% deducted for expenses, giving a qualifying income of about $135,000 from one borrower. The sale proceeds and savings reduced the mortgage from about $554,000 to about $480,000, 65% of value, on a two-year fixed term at about 6.6% in 2024, with a 30-year amortization. All consumer debt, about $70,000, was paid before the advance, and the inter alia charge on the family home was discharged.
The Outcome
Two private mortgages, one paid out by the sale and one by the refinance, became a single alternative-lender mortgage at a rate in the sixes; the family home was released, the debts were gone before closing, and the couple kept about $340,000 of savings and retirement funds intact. For a self-employed borrower whose income has just stepped up, a signed contract is evidence a lender can use today, and the stated-income program is what lets it count before the tax returns catch up.