The Situation
The client, a married business owner with adult children, has run a residential and commercial cleaning company for 32 years, owns a Metro Vancouver home worth about $3.8 million with two rented suites, the commercial bay the business has operated from for 28 years, and a rental condo worth about $440,000 rented at about $2,800 a month. The condo carried a private first mortgage of about $324,000, and the commercial property carried private financing too, on a file with a 712 score and minimal debt.
The Challenge
Private mortgages on a borrower with this income and this equity are a cost without a reason. The income simply lives in the corporation: about $1.19 million of deposits over twelve months, which a tax return understates by design and a bank's two-year average cannot reflect.
The Solution
In 2024 we refinanced the rental condo with an alternative lender under its stated-income rental program: twelve months of business bank statements documented the revenue, 65% was deducted for expenses to a net income of about $416,000, and the lease supported the rental. The new mortgage of about $352,000, 80% of value on a one-year term at about 6.9% with a 30-year amortization, paid out the private lender and the closing costs, with anything left over going against two small card balances. The debt-service ratios sat at 8% and 41%.
The Outcome
The rental condo now carries an alternative lender's rate instead of a private one and a lower payment against the same rent. A business owner's bank statements are the income; placed with a lender that reads them, private financing stops being necessary.