Part 2
Self Employment comes in many forms. You may own your own business, be a contractor, or rely on commissions as your sole source of income. As I said in my last entry, obtaining credit in lean times is very difficult when dealing with a conventional banker.
I recently had a situation where my client was the owner of a business with no debt, worth millions of dollars, yet for tax and divorce reasons chose to defer 1 years worth of income. It was mortgage renewal time, and his bank responded with “we will reluctantly renew this mortgage with a 1% fee and a 2% rate premium”.
At the end of the day, after an extensive meeting, we decided upon a new variable rate mortgage to pay out the existing first mortgage and a large personal line of credit (at prime plus 2.0%) combining the two into a new first mortgage loan at 2.25% (prime less .75%)
The moral of the story: Contact an experienced, knowledgeable mortgage broker with great references.
Rick Moran, AMP, OMB#M08001997
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