Background
Our client is a single applicant seeking to refinance an investment property currently financed with a different lender through a short-term lending arrangement that was nearing its maturity date. In addition to refinancing, the applicant hopes to access equity for working capital.
Challenges
We were approached by the clients’ adviser as they were unable to obtain finance through traditional lenders due to a combination of factors:
- Large lending amount at $3,891,861.00 against one security only
- Demonstrating servicing from varied income streams
- Concerns around why the clients’ exit strategy had not been successfully executed with their current short-term lender, raising red flags for new financiers
Mitigants
Working alongside their adviser, we took a holistic view of the clients’ financial situation and identified several key strengths:
- The property is a standard residential property located in a main centre.
- The existing interest only repayments to the current short-term lender at 10.5%p.a. were higher than our proposed repayments—demonstrating clear affordability and borrower capacity.
- Low Loan-to-Value Ratio (LVR) at 63%, based on a registered valuation.
- A clear exit strategy is in place with the planned sale of the property. However the current lender didn’t allow additional time for the client to execute her exit strategy. A developer was interested in her property in conjunction with adjoining neighboring property. A joint sale would increase her sale value but require longer time to negotiate while the developer completed their due diligence.
- The applicant has a solid credit score and overall financial profile.
- The client’s broader investment property portfolio offers additional security if required to support repayment.
Solution
With our multiple funding lines, we were able to structure a tailored solution that enabled the client to refinance their existing short-term loan and access a modest equity release for working capital. The new arrangement also provided a 2-year extension, so the client didn’t need to sell the property in the current market condition and could continue their negotiations with their neighbour and the interested developer.
LOAN AMOUNT
$3,891,861
INTEREST RATE
9.50% p.a.
TERM
24-month interest only
LVR
63%
AVANTI FEE
1%
ADVISER FEE
1%
COMMISSION
Not applicable for short term product
CASE STUDY - PROPERTY LENDING
Short Term First Mortgages for Bridging Property Investment Loan
Our short term first mortgages are flexible solutions for property investors who need fast, practical funding outside traditional lending channels.
With our multiple funding lines, we provide tailored solutions that help your clients access large funds, unlock capital, and manage cash flow.
Do you have clients in a similar situation? Let’s talk.