When a busy doctor who had worked with banks to set up finance for her investment properties visited a mortgage finance adviser, she walked away with three more properties and a newly simplified finance structure that saved her money.

Lisa Collins*, a doctor who had purchased six investment properties while working with bank loan officers, called on a mortgage credit adviser to help her streamline the loans attached to the assets.

“As I started working more closely with her, I discovered there was a complex web of loans attached to the portfolio,” says the credit adviser. “So it made sense to try to rationalize and simplify the loan structures. At the time, she had loans with three different banks and didn’t know which properties were used to secure individual loans.”

Each time Collins bought a new property, she took out a new loan. As a result, there were multiple loans attached to each property, as she had accessed the equity in the existing properties to purchase additional properties. As well, many of the properties in the portfolio were cross-secured, creating a very complex arrangement.

“The problem we faced was that any refinancing would almost certainly have involved a massive exposure to lenders’ mortgage insurance,” says the credit adviser. “But she had a huge plus in her favour: as a doctor, she was able to take advantage of a benefit some lenders give doctors so they don’t have to pay mortgage insurance.”

Knowing this, and knowing which lenders offered this bonus, meant the by credit adviser was able to restructure the loans attached to Collin’s property portfolio so that there was only one loan associated with every property, rather than two or three.

“We made sure none of the properties were cross-secured, making a very complex structure much more simple. It’s also certainly helped her accountant at tax time,” the credit adviser says.

With the credit adviser’s help, Lisa purchased a further three investment properties, and now owns nine in various locations, worth approximately $4 million dollars.

*Client’s name has been changed.

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