Here is a scenario where a couple with a past bankruptcy secures 80% LTV to renovate their home to include a basement rental suite and improve their cash flow.
Clients:
Married couple
Verifiable incomes proven by letters of employment and recent pay stubs
Credit:
Primary applicant has a 582 Beacon due to previous bankruptcy
Client has strong repayment history since bankruptcy
Stressed TDS of 41% using the mortgage rate plus 200 BPS
Property:
Marketable owner-occupied detached property with unfinished basement
Comparable homes average 26 days on market
Deal Rationale:
The client qualified for a 1 year mortgage at 80% LTV to pay off their existing first and second mortgages. The remaining equity was re-invested into their home to renovate their basement into a rental suite. The couple now has an improved cash flow of $600/month and a rental suite to generate additional income.
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