Background
The clients were in a new relationship, each owning a property with small mortgages on each. They wanted to buy a jointly owned home and found their dream house in a new town, where they had also secured new employment. One of their properties had sold but with a long-term settlement of 5 months, while the other was rented. They required a bridging loan to settle their new home while waiting for the long-term settlement on one property and the ability to market the rented property when the timing worked for them.
Challenge
- Their main bank wasn’t willing to support their application due to open bridge for one property and later settlement for the other
- New jobs in a new location
- Uncertainty of end position and timing after property sales.
Mitigants
- Their mortgage adviser provided detailed information so potential risks and mitigants could be assessed
- Good LVR position at 61%
- Good affordability with a positive UMI position (using conservative end position amounts)
- Strong, achievable exit strategy
- Hard-working couple who are highly experienced in their respective fields.
Solution
Avanti provided a 12-month interest-only first mortgage, allowing the clients to relocate and go unconditional on their new home.
- Loan amount: $896,000
- Interest rate: 10.95% p.a.
- Term: 12 months first mortgage
- Avanti fee: $705
- Adviser fee: 1%
- LVR: 61%
If the loan is repaid in full within the 12-month term, only a $23 prepayment fee will apply. We used purchase price and desktop valuations, no need for RVs.