Case Study 8

Purpose Applicant wants to refinance a newly constructed home to consolidate 1st and 2nd mortgages and payoff $25K in debts Income and Debt Servicing Salaried income earning $89K annually Employment verified by employment letter, pay stub, and verbal confirmation by employer GDS/TDS is 36/36% with stressed TDS of 43% using the mortgage rate plus 200bps Mortgage Details LTV 80% Pre-Construction Property Value (2016) $400,000 Post-Construction Property Value (2018) $500,000 GDS/TDS Calculation Salaried Income  100% $89,000 GDS/TDS 36/36% Stressed TDS 43% Credit 550 Beacon due to piling of bills during past unemployment Excellent mortgage repayment history Property Newly constructed home purchased in 2016 $500,000 current appraised value 3 comparables in a highly marketable prime lending area with DOM under 90 Deal Rationale: The client was able to refinance their home for $400K on a 1 year term at 80% LTV. The client was able to consolidate their 1st and 2nd mortgages, $35K in debt, and improve their cashflow by $700 monthly.

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