Background
The client was in the final stages of a build and had used her own savings to this point but had experienced some cost over runs and needed a further $50,000 to complete the build and obtain a Code of Compliance Certificate.
Challenge
The main bank provider wouldn’t assist with a top-up to her home loan as they didn’t want to take on the build part way through. We needed to understand what was required to complete the build and costings to achieve this to ensure that the client would finish the build and be able to refinance to a main bank once the CCC is issued.
Mitigants
- Good equity position LVR including first mortgage at 63%
- We used land only value and did not require a registered valuation – relied on capital value
- A comprehensive breakdown of costs to complete and understanding of build stage to date were provided
- We were confident our funding would get the property finished and code issued
- Proposed refinance exit, but our 7-year term allowed flexibility for the client
- We would control release of funds to suppliers on invoices
- Good account conduct evidenced
- Demonstrated ability to service with bank for refinance take out
- Clear credit check.
Solution
We were comfortable supporting this client with a Caveat Secured Personal Loan to enable them to complete their build.
Loan amount: $50,000
Interest rate: 16.5%
Term: 7-year principal and interest
Avanti fee: $485 plus $170 to register the caveat
Adviser fee: $1,500
Commission paid: No commission paid on our short-term solutions
LVR: 63%
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.