Background
A solo parent in a provincial city was about to receive an inheritance from her father’s estate. She wanted to buy her first home to provide stability for her and her child.
Challenge
- Historic credit issues only recently repaid
- Some recent account conduct issues with dishonours
- Income all from Working for Families, child support and solo parent benefit.
Mitigants
- Inheritance pay out to be used for home loan deposit
- Previous account conduct issues mitigated well by the Mortgage Adviser
- With benefits/child support, we could demonstrate good UMI
- A couple of small new debts, but they were being well managed
- 50% LVR
- Acceptable security
- Client working with budget adviser to further address account conduct issues.
Solution
Due to client’s overall profile, she did not meet our Near Prime offering, but with the mortgage and budget adviser’s support and guidance, we were confident that the client will be able to better manage her day-to-day finances and maintain her loan repayments. We therefore offered a specialist long-term home loan solution.
The home purchase enabled her to put her inheritance to good use, providing her with better accommodation and living stability.
Loan amount: $203,750
Interest rate: 10.6% p.a. (specialist long term mortgage)
Term: 30 years (P & I)
Avanti fee: $705
Adviser fee: $1,629 (charged 0.80% of loan amount, could have charged up to $3,000)
Commission: 0.80% of the loan amount (subject to clawback if repaid in full within 12 months)
LVR: 50%
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.