Real Estate

Need advice from mortgage brokers on here - Waiting for Certificate of compliance

  • Last Updated:
  • Jan 19th, 2018 7:10 pm
[OP]
Deal Addict
Apr 21, 2014
2316 posts
1100 upvotes
Alberta

Need advice from mortgage brokers on here - Waiting for Certificate of compliance

I have a question that hopefully the mortgage brokers on this site would be able to help me with. I have moved to the U.S.A in September 2017. My principal residence that I had in Alberta is up for sale and hasn't sold as of yet. By the time the house sells I will already be considered a non-resident for tax purposes. So I have to get a certificate of compliance from the CRA (which could take months to process), at the time of the sale the lawyers will hold back 25% of the purchase price of the property in escrow until they get the certificate of compliance. But I do not have 25% equity built as of yet, my mortgage is with MCAP.

As an example:

House price: 800k
Mortgage Balance: 670k
Holdback will be 200K.
Real estate commissions will be roughly: 32,000

Based on the numbers above. I will get 800k-32k-200k(holdback until certificate of compliance comes in) = 568k. I owe MCAP 670k to clear my mortgage. So I am short 102k temporarily until the Certificate of Compliance comes in (which can't be initiated until I have a firm agreement of purchase and sale). How can I get the 102k? Do mortgage companies have anything in place for situations such as this?
1 reply
Deal Guru
User avatar
Feb 2, 2014
10402 posts
3041 upvotes
Toronto
The CRA told you it takes months to get???

I had a client in a similar situation as you and he got a certificate fairly quickly (it was a few years ago).

Unless things have changed since then, that part doesn't sound right. If the CRA told you that, I will look into his file and take a look into how fast we got it, but I'm fairly confident it was within a month.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative

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