Self Employed Equity Take Out To Consolidate Debts
Self-Employed Equity Take Out
A single father who had gone through a divorce and was left with his four-year-old daughter had a lot of debt to deal with. He struggled to pay off his past debts due to the challenges of working through the COVID-19 pandemic and wasn’t able to move forward financially.
He needed to consolidate his debts into a more affordable payment amount but many traditional banks declined to extend a mortgage loan to him because he has maxed out his debt-to-income ratio.
He needed a solution from alternative lenders who will lend him a loan based on the equity in the house so can pay off the high-interest debts and reenergize his business to generate more income.
Challenges |
|
Location |
Halifax, Nova Scotia |
Property value |
$700,000 |
Mortgage |
$395,000 |
LTV |
56.40% |
Solution |
Refinance the property and qualify based on the equity available in the property for a 1-year term. This lowers the debt services to a monthly payment amount that the client could afford. Also, the client was able to restructure and expand his business operations to generate more income. |
Exit strategy |
Refinance with a traditional lender at the end of the 1-year term with increased income and lower debt-to-income ratio. |
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