Background
A single man in his mid-30s sought to purchase an owner-occupied home in a main New Zealand city, with lending at 90% LVR.
Challenge
The customer had previously experienced some credit challenges, which impacted their credit score. While these issues were in the past, they were a factor in the assessment process, particularly when seeking lending at a higher LVR from the main bank. Additionally, the inclusion of boarder income was considered as part of the overall assessment, adding further complexity to the lending decision.
Mitigants
- The customer was permanently employed with verifiable overtime
- Boarder income was supported by a letter confirming the intent to reside in the property, which was reasonable for a single applicant purchasing his first home.
- The credit issues were over two years old, with a fully repaid judgment. His current financial profile did not reflect his past issues.
- The deposit largely came from the customer’s KiwiSaver, supplemented by verified gifting.
Solution
We implemented a practical solution enabling a first-time homebuyer with previous credit issues to move into his own home.
- Loan amount: $546,105
- Interest rate: 8.90%
- Term: 30 years P and I
- Avanti fee: $705
- Adviser fee: $5,400
- Commission: 0.80% with a 24 month clawback period to apply
- LVR: 90%
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.