Background
A 52-year-old father and his 22-year-old daughter wanted to buy their first home together and looked forward to putting their past struggles behind them by owning and living in their own home.
Having enjoyed renting the property for some time, father and daughter were offered the opportunity to purchase the property they called home from their landlord through a private treaty but needed $379,000 to do so.
Challenge
The father struggles with his health and is receiving a disability benefit and the daughter was on a modest income, so affordability was potentially going to be the key challenge here. Only minimal savings and KiwiSaver towards the deposit, with the balance being gifted. Their main bank had said no due to the father being on a disability benefit, so their adviser reached out to Avanti Finance to see if we could help them get into their first home.
Mitigants
- Under 80% LVR
- Gifted deposit – was from family looking to support them into home ownership
- Stable employment for daughter
- Comfortable relying on the father’s disability income while he continues to recover
- Using both incomes, including the father’s disability benefit, we could demonstrate affordability
- Good account conduct
- Only small credit card debt
- Strong, unblemished credit history and profile
- Acceptable security.
Solution
Long-term 30-year Near Prime 1st Mortgage, resulting in a great outcome for these customers who can continue to enjoy living in the place they already call home, but now with the additional knowledge, comfort, and security of knowing they own it.
- Loan amount: $379,000
- Interest rate: 8.90% p.a. (Variable rate with 25 bps discount for 2 years from drawdown)
- Term: 30-year 1st Mortgage
- Avanti fee: $705
- Adviser fee: $3,790
- Commission: 0.80% of the loan amount (subject to clawback if repaid in full within 24 months)
- LVR: 79%
Rates and fees were valid at the drawdown of the specific loan facility in each case study, new loans are subject to the rate at application. A copy of our current rates and fees can be found here.