Investment property purchase with a high LVR

28 May 2024

Background 

A couple on work visas purchased an investment property off the plans as an OIA exempt property.

Challenge 

The clients completed the registered valuation due to being a new build, which came in lower than the Sale and Purchase Agreement. Due to the lower value, the main bank provider would only go to 80% due to the nature of the clients’ residency status. The clients were unable to meet the additional 5% deposit required and needed 85% LVR.

Mitigants 

  • Clients are in stable employment
  • Clients eligible to purchase as an investment property
  • Clients working towards gaining NZ residency
  • Good account conduct evidenced
  • Low liabilities
  • Clear credit check
  • New build security in a good location
  • Genuine savings with some gifting involved.

Solution 

We were comfortable supporting these clients with a long-term (Near Prime) first mortgage at 85%. This ensured they didn’t lose their deposit or face litigation if they could not settle.

Loan amount: $833,000
Interest rate: 9.65% p.a.
Term: 30-year principal and interest payments
Avanti fee: $8,330
Adviser fee: $8,330
Commission: 0.80% of the loan amount (subject to clawback if repaid in full within 24 months)
LVR: 85%

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.

Disclaimer: This case study is solely for information purposes and is not intended to be financial advice. Neither Avanti Finance nor any person involved in this case study accepts any liability for any loss or damage whatsoever which may directly or indirectly result from any information, representation or omission, whether negligent or otherwise, contained in this case study.

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