Here is the story of Jean-Francois and Charles. Both own their own home and would like to invest in real estate in order to diversify their savings.
After months of searching with their real estate agent for a profitable well-built property, complete with good tenants, they finally found their diamond in the rough.
Unfortunately, they were ill- informed on the amount of the down payment needed to purchase a non-owner occupied fourplex.
The bank refused to approve their loan. They needed to make a down payment of 20% ($100,00), but they only had $75,000. Jean-Francois had his $50,000, but Charles only had $25,000. Fortunately, they were advised to consult with a mortgage broker to find a solution to their acquisition problem.
Once they reviewed all their options, Charles decided to re-finance his home, thus freeing up the missing $25,000. I recommended he contract a mortgage that could be divided into separate parts. This type of mortgage allowed the current mortgage Charles had on his home to remain unchanged, while the additional $25,000 needed for the fourplex was borrowed under whatever terms and conditions Charles chose.
Moreover, since the loan was separate from his home mortgage, it was then easier for his accountant to deduct the interest on the $25,000, borrowed for investment purposes.
Jean-Francois and Charles are now the happy owners of a profitable fourplex - an investment that will certainly strengthen their retirement portfolio!
Do not hesitate to communicate with me if you would like more information regarding mortgage loans. It would be my pleasure to share my knowledge and experience with you!
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