Case Studies

Clients facing Foreclosure

Purpose:
Clients needed to refinance their home and take out equity to get out of a Power of Sale situation. They had missed three payments on their mortgage, were in property tax arrears and their home insurance policy had been cancelled. The unsecured debt had accumulated along with CRA debt.

Financial Details of Borrower:
Debts:
First Mortgage: $276,00
First Mortgage arrears: $15,000
Property Tax arrears: $5,000
CRA debt: $3,000
Unsecured Debts/Collections: $15,000

Income:

Main Applicant: Self Employed Client running a small Tiling & Renovation business
The business had been slow this year, had a rough time catching up with the bills
Gross Income: $1,000 – $2,000/monthly, mainly cash
Declared: $10,000
Co-applicant – wife – stay home mom taking care of 3 young kids
Wife received: Child Tax Benefits: $1,980/monthly

Credit Scores:
Main applicant: 497 credit score
Co-applicant: 417 credit score
Multiple late payments and accounts in collections

Any Complications:
Credits were extremely low, and many of their accounts were in collections.
The property was in mid renovations, 2nd level floors and kitchen were ripped out.

Financial Details of Loan Secured:
Financing Institution:

Private Lender

Details of the Loan:
Loan Amount: $60,000
Term: 1 year, interest-only payments, fully open (repayable without any penalty)
Interest Rate: 10.99% fixed rate
Loan to Value: 61%

** We paid out the full year interest payments up front, clients didn’t have to worry about making payments on this loan**
All their mortgage and property tax arrears were paid out.
They got a new home insurance policy, paid the full year in advance from the funds.
All unsecured debts/collections were paid off from the proceeds along with the CRA debt.
They even had some money left over to finish the renovations in the home.  They are happy to be able to keep their home and have received a new chance at a new beginning.

Fees:
Lender Fee: $3,800
Brokerage Fee: $2,500

Options they had been offered:
Other mortgage brokers had quoted them extremely high-interest rates and fees starting from 15% rate and 15% lender/broker fees.

Investment Property Portfolio

Purpose:
Clients wanted to purchase their 5th investment property
Purchase Price: $500,000
Required mortgage: $387,200

Financial Details of Borrower:
Debts:
Clients owned 5 existing properties, 1 principal residence and 4 investment properties

Mortgages:
Principal Residence: $347,000
1st Investment Property: $367,000
2nd Investment Property: $323,000
3rd Investment Property: $245,000
4th Investment Property: $379,000
Unsecured debts: $71,000

Income:
Main applicant: Warehouse worker: $70,000
Co-applicant: TTC Bus driver: $54,000
Gross Rental Income: $103,000/annually
Liquid Assets: $136,000 (used for down payment)

Credit Scores:
Main applicant: 815 credit score
Co-applicant: 845 credit score

Any Complications:
Clients were overextended with mortgages and unsecured debt
Financial Details of Loan Secured:
Financing Institution:
B Lender
Details of the Loan:
Loan Amount: $387,200
Term: 1 year, Amortized over 30 years
Interest Rate: 4.99%
Loan to Value: 77.5%
Fees:
Lender Fee: 1% of loan amount ($3,872)
Brokerage Fee: 1% of loan amount ($3,872)
Options they had been offered:
Their bank could not help them due to high ratios, they were overextended with their mortgages and unsecured debts.