Background
A young couple with no dependents were eager to purchase their first owner-occupied property. They faced several financial challenges but were determined to make their dream a reality.
Challenge
Their home loan application to main bank was hindered under the traditional lending criteria due to the following factors.
- Short-term debt, including recent car loans
- Minor account conduct issues
- Reliance on boarder income at >80% LVR
- Historic small credit issues
Mitigants
Working with their adviser, we closely examined their overall financial profile and were confident about several strengths ignored by their main bank lender:
- They were permanently employed with long-term tenures.
- Boarder income was supported by a letter confirming the intent to reside in the property, which was reasonable for a couple with no dependents.
- Their credit was now clear, with an acceptable explanation for past issues.
- Their new short-term debts had a good repayment history.
- Minor account conduct issues were mitigated by the adviser, and our assessor was comfortable with the explanation provided.
- Deposit was sourced from KiwiSaver.
- A registered Valuation demonstrated good security with no deferred maintenance or issues.
Solution
Valuing their potential, we offered this young couple a 30-year near prime first mortgage allowing them to overcome previous credit and deposit hurdles and buy their first home.
LOAN AMOUNT
$629,000
INTEREST RATE
7.75% p.a.
LVR
89%
TERM
30 years, Principal and Interest
AVANTI FEE
$705
ADVISER FEE
1%
COMMISSION
0.8% with a 24-month clawback period
CASE STUDY - PROPERTY LENDING
First Home Loan for First-Time Home Buyers
First-time home buyers often face challenges like high deposit requirements, strict credit criteria, and limited borrowing options, making it hard to get on the property ladder.
As a specialist lender, our team takes a flexible, holistic approach—considering factors beyond standard credit checks—to create tailored solutions that help buyers overcome these hurdles and achieve homeownership sooner.