Background
Clients needed to refinance to enable urgent remedial work on the security property, consolidate debt including tax arrears, and restructure existing ownership based on advice from their accountant and solicitor.
Challenge
- The main bank wouldn’t support their application due to tax arrears
- The property had flood damage, and although insurance claims were completed, some remedial work was still required to fully restore the property.
Mitigants
- Strong applicants with excellent credit scores
- Solid incomes from a successful long-term business and PAYE income
- Excellent account conduct
- Current tax up to date, only historical arrears
- Low LVR using Ival (desktop valuation)
- Comfortable with works completed from insurance payout
- New works required for reinstatement of a shared access road not covered by EQC/insurance
- Clients could meet interest-only repayments.
Solution
Avanti provided a 12-month interest-only loan to allow time to clear IRD arrears, complete remedial work, and consolidate short-term debt. The clients’ aim is to refinance back to their main bank with a good repayment history and no IRD arrears. The client must be able to demonstrate that they have sufficient income levels to support refinancing back to the bank.
- Loan amount: $582,000
- Interest rate: 10.5% p.a.
- Avanti fee: $705
- Adviser fee: $3,850 (up to 1% can be capitalised)
- LVR: 43%
If the loan was repaid in full within the 12-month term, only a $23 prepayment fee would apply.