Friday, November 30, 2018

Case Study 12



Purpose
  • Applicant wants to refinance home to pay off all outstanding debt and have monthly cash flow savings
Income and Debt Servicing
  • Commission-based income earning $90K annually, confirmed by previous 2 year's T4A gross and Year to Date commission statement
  • Employment verified by employment letter and verbal confirmation by employer
  • GDS/TDS is 37/37% with stressed TDS of 44% using the mortgage rate plus 200 BPS

Mortgage Details
LTV80%
Property Value$500,000


GDS/TDS Calculation

Commission-based Income100%$90,000



$90,000

GDS/TDS
37/37%

Stressed TDS
44%


Credit
  • 540 Beacon due to missed bills during marital conflict 
  • Excellent mortgage repayment history
Property
  • $500,000 property value
  • Good condition, well maintained property
  • Suburban area with DOM under 90
Deal Rationale:

Client was offered a 1 year mortgage at 80% LTV. The client was able to consolidate all of their loans and credit card debt and is saving $500 monthly. 
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