Background
The client sought a top-up caveat loan to cover tax arrears and cosmetic renovations for an existing property, with plans to sell the property upon completion.
Challenge
The main bank provider was unable to demonstrate servicing due to test rates applying to the overall global position of the client’s portfolio.
Mitigants
- Stable employment
- Good account conduct
- Low LVR
- Low liabilities
- Strong location of the security property
- Clear credit check
Solution
We were comfortable supporting this client with a caveat loan, enabling them to pay off the IRD tax arrears and complete renovations before selling the property. This solution allowed the main bank lending to remain in place at a lower interest rate, while we used actual loan repayments (with no test rate applicable) to demonstrate servicing on an interest-only basis.
- Loan amount: $100,000
- Interest rate: 14.95%
- Term: 2 years (Interest Only)
- Avanti fees: $485 Establishment Fee and $170 Caveat Registration Fee
- Adviser fee: $2,500
- LVR: 51%
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.