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AuthorMark ChurchillDateJanuary, 2024Share

Our client, an existing client of a leading bank, was seeking to elevate their lifestyle by upgrading their family home and unlocking equity for a 10% deposit. The client, self-employed and a partner in Business A for over five years, had recently embarked on a new venture, Business B, for the past six months. Additionally, the wife had recently returned to casual work after a one-year hiatus.

Challenge:

When the client initially approached their lender, the funding amount fell short of their requirements. The new business B, posed a challenge as it had only been trading for six months, failing to meet the Retail Residential Lender’s policy requiring a minimum of two years of full financials. This restriction eliminated many potential lenders.

Our Approach:

Understanding the complexities, we proactively sought solutions. Recognising that the existing lender couldn’t meet the required funding, we explored alternatives. Leveraging our knowledge of another Business Bank’s policies, we crafted a comprehensive application strategy:

• Utilising Management Reports and Cashflow Forecast: We presented management reports and a cashflow forecast for the new business B to substantiate the servicing assessment.
• Leveraging existing business data: We utilised management reports for the well-established business A to strengthen the application.
• Incorporating wife’s casual income: Considering the recent return to casual work, we included the wife’s income to bolster the financial profile.
Outcome: Our strategic approach yielded a successful outcome, enabling the client to:
• Borrow 90% with Lender Mortgage Insurance waiver: Despite the challenges, we secured favourable terms, allowing the client to borrow 90% without the burden of Lender Mortgage Insurance.
• Release equity for a 10% deposit: We successfully facilitated the release of equity to cover the required 10% deposit for the new home.
• Purchase their ideal family home: With the obtained funding and equity release, the client was able to purchase a new family home that perfectly suited their needs.

If you would like to discuss your ability to release equity from your property to finance a project, contact the Allfin team today.

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Mark Churchill is a Credit Representative (Credit Representative Number 401139) of BLSSA Pty Ltd (Australian Credit Licence Number 391237). Diem Le is a Credit Representative (Credit Representative Number 483969) of BLSSA Pty Ltd (Australian Credit Licence Number 391237).