The Situation
The clients, a common-law couple in Metro Vancouver, were weeks from completing a presale condo bought four years earlier when they found the home that actually suited them, a ground-level three-bedroom condo. They decided to sell the presale on completion and buy the new home first. One client had left three decades in a senior role at a transportation company to incorporate in late 2021 and build a business of the same kind; the other had been with one employer since 1997.
The Challenge
No bank would carry a presale completion and a second purchase at once on an income that was two years incorporated and still growing into its real number on paper. The purchase had to close in December regardless, and the presale, due to complete a month later, could not be sold before it existed.
The Solution
We placed a private mortgage, open with no penalty, at 75% of the price, about $554,000 at about 10.5% in 2023, on a one-year term, with 25% down from savings; the business income was documented from twelve months of bank statements, and the two credit files read 667 and 841. To reach the amount needed we took a family home in Metro Vancouver that one client co-owns as additional inter alia security, with the co-owner joining the application, so one mortgage was registered on both properties.
The Outcome
The couple completed on the home they wanted in December 2023. The presale completed the following month and was listed, and the open term meant the private mortgage could be paid down from the sale proceeds and refinanced with an alternative lender on stated income with no penalty, which is exactly what followed within the year.