Background
Our clients had purchased a commercial property in Wellington and undertook significant redevelopment. After completing the required NBS strengthening, they converted the downstairs into a commercial warehouse for their own business and the upper levels into six unit titled apartments. With the project nearing completion, they were looking to refinance out of their short-term development funder to find a long-term funding solution, hoping to add the six units to their rental portfolio.
Challenges
The clients faced several hurdles in securing long-term financing due to the nature of the property, lending history, and income structure.
- No recent previous mortgage lending history
- Existing loan with a private lender on a capitalising basis
- Main banks would treat the property as commercial, offering only short-term loans with higher rates due to the nature of the security.
- Zoning change to residential still in progress
- Complex income mix: self-employed, local rental, and overseas rental income
Mitigants
The adviser provided a well-prepared and clearly documented application, allowing us to fully understand the clients’ financial position and gain confidence in supporting them.
- Clients were high-net-worth individuals
- Minimal existing debt, limited to credit cards paid in full each month
- Strong credit profile with a clean history and high credit score
- Excellent equity position across their property portfolio
- Low loan-to-value ratios (LVR) on both the owner-occupied residential property and the six-unit apartment block
- Longevity in business with a good understanding of their industry
- RV for the apartments demonstrated acceptable securities (Ival value used for their owner occupied)
Solution
We structured a Near Prime long-term mortgage at residential rates , providing a tailored solution that suited the client’s needs.
LOAN AMOUNT
$3 million
INTEREST RATE
6.90% p.a.
TERM
30-year term with 2-year interest only
LVR
58% across seven properties
ADVISER FEE
$1%
AVANTI FEE
1%
COMMISSION
80% of loan (subject to 24-month pro-rata clawback term)
CASE STUDY - PROPERTY LENDING
Complex Lending Made Simple
At Avanti, our bespoke lending solutions are designed to meet your clients’ diverse needs, whether they’re transitioning from development finance to long-term investment, managing mixed-use properties, or dealing with non-traditional income streams. With flexible structures, a wide range of funding options, and a tailored approach, we work closely with you to craft the right solution for even the most complex scenarios.
If you have clients in a similar position, get in touch.