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.