Applicant purchased a new construction home for $400,000 in December 2017 and wants to capitalize on lift in value
Property
Contract to purchase with a $25,000 deposit was entered into in Dec. 2017
$500,000 current appraised value
3 comparables in a highly marketable prime lending area with DOM under 90
Credit
575 FICO score
Excellent mortgage repayment history
Income and Debt Servicing
Salaried income earning $89,000K 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 (Dec. 2017)
$400,000
Current Market Value (2018)
$500,000
Loan Amount
$400,000
GDS/TDS Calculation
Salaried Income
100%
$89,000
GDS/TDS
36/36%
Stressed TDS
43%
Deal Rationale:
Client got a 1 year mortgage for $400,000 (which is 80% LTV of current market value for the home and also doesn't exceed 100% of the original purchase price). The client was able to get his $25,000 deposit back.
Did you know?
This scenario can help anyone with Rent-to-Owns and Pre-sales contracts. For more information, don't hesitate to contact us.
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