Background
A couple was looking to refinance their current lending, which was obtained to build three townhouses via property development funding.
Two out of the three townhouses have been sold with the remaining dwelling to now be their owner-occupied property asking for a like-for-like transfer of residual lending.
Challenge
One of the applicants is currently training to become a qualified nurse. Her training doesn’t finish until November 2024 so demonstrating servicing in the traditional sense was problematic.
Mitigants
- Clients have funds available to assist with servicing until the client starts her employment in November
- Client has been offered a full-time contract once her training has been completed
- Client had been employed by this employer prior to commencing her studies and could also return to her old role if she did not pass her qualifications
- Skilled worker with nurses in short supply
- Good account conduct evidenced
- Good overall profile
- Low liabilities
- Clear credit check
- Clients are able to take on boarders as the property has four bedrooms and they have no dependents
- Low LVR.
Solution
We were comfortable supporting these clients with a long-term (Near Prime) first mortgage at 8.90% p.a. over 30 years with Interest only payments for 12 months and with additional funds being available to assist clients with servicing the shortfall until the client starts full-time employment.
Loan amount: $850,000
Interest rate: 8.90% p.a. (Variable rate with 25 bps discount for 2 years from drawdown)
Term: 30 years
Interest-only period: 12 months
Avanti fee: $705
Adviser fee: $8,500
Commission: 0.80% of the loan amount (subject to clawback if repaid in full within 24 months)
LVR: 62%
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.