How do I know whether a mortgage rescue plan has a credible exit?

The client problem

A short-term loan closes the immediate problem, then renewal arrives with the same income, lower value and less equity because fees were added.

A practical Ontario example

The proposed exit is a B refinance after twelve months. Test the required credit score, income documents, mortgage payment history, property value and maximum loan-to-value now, then review progress every quarter.

How the lending routes may differ

• A exit: needs standard provable income, credit, ratios and acceptable property.
• B exit: may use business bank statements, financial statements, T1 add-backs or other lender-approved income methods.
• Sale exit: needs a conservative price, realistic marketing time and enough proceeds after every mortgage and cost.

Policy boundary: FCAC expectations discussed here apply to federally regulated financial institutions and do not require every lender to offer the same relief.

Questions to ask now

• Which lender category is the target?
• What exact condition must change?
• What is the backup exit?
• Does the temporary term allow repayment when the exit becomes available?

Rajiv’s practical view

A rescue mortgage is successful only when the borrower leaves it on time and with equity intact. Review the exit before signing and again well before maturity.