Background
A couple aged in their early sixties wanted $50,000 to do some cosmetic home improvements before they placed their property on the market, intending to list in the next 12 months or so.
Challenge
- One of the clients has been off work on ACC and only just back in full-time work
- Their main bank wasn’t willing to assist due to recent ACC income
- Affordability had been challenging with ACC income, but now demonstrated easily with full-time income.
Mitigants
- Excellent equity position
- Good account conduct and loan repayment history
- Cosmetic renovation would enhance the property and maximise sale price for clients.
Solution
We provided the client with a caveat secured personal loan. A longer term of 7 years ensured monthly repayments were manageable and provided them with more flexibility around time to sell down. And if they settle the loan in full before its final payment date, our prepayment fee at the time was only $23.
Loan amount: $50,000
Interest rate: 16.5% p.a.
Term: 7-year P&I
Avanti fees: $485 establishment fee and $170 to register the caveat
Adviser fee: $1,250
Commission: No commission paid for these products
LVR: 28%
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.