💼Business owners (and realtors – look into setting up a PREC see blog link here), are you retaining money in your business by not taking a fair amount of salary due to growing your business or simply trying to save on personal taxes? And at the same time, you are having trouble qualifying for a mortgage due to the low personal income you are showing?

💡This may be a gamechanger for you:

There are some lenders that would consider part of your company’s income after tax IN ADDITION to your personal income, which would significantly increase your borrowing power for a mortgage. This is a win-win situation with tax and mortgage. 😙

🔑The key is to find those lenders – please reach out to a mortgage professional near you. 😉

Have you ever wondered why some people purchase real estate inside a holding company? Would this setup work for you?

If you belong to one of the following groups, you’ll be able to take advantage of using a holding company to purchase investment properties:

1. You are hitting capacity qualifying for mortgages under your personal name – use this setup to increase borrowing power

2. You are a business owner and have an incorporated business, with excess funds to invest – use this setup to benefit from tax deferral between your personal margin tax rate and corporate tax rate

3. You are at the highest tax bracket (54% in Ontario), you would enjoy tax savings of purchasing investment properties in a holding company.

Top 3 misconceptions of getting mortgages in a holding company:

❌You need income in the holding company to qualify for a mortgage – You actually qualify using your personal income – just like a regular mortgage. This is why you can get a mortgage for a brand new holding company.

❌Mortgage rates are much higher for a mortgage in a holding company – This is not true at all. In some cases, the rate could be the same as a regular mortgage!

❌It is more difficult to obtain a mortgage in a holding company – While it is true that not all lenders provide lending to a holding company, but there are a lot of them that does (including Big 5 banks)! You just have to know who they are, and this is where having a mortgage agent that is experienced in this area makes a huge difference.

✅A holding company setup is a good tool that can be utilized to grow your real estate portfolio.  It is somewhat an unknown goodie to most people.

If you are interested in learning more about buying real estate in a holding company, please reach out and see how you can take advantage of this setup with your specific situation.

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