Background
A retired client, who is a professional rental investor/landlord, had their current lending with another non-bank lender. They required a top-up of $776,000 to facilitate take out/refinance of vendor finance on one of their securities and to pay for consents and costs associated with subdividing one of their other security properties. They were also looking for a reduced interest rate from what they were currently paying.
Challenge
Their current non-bank lender was no longer active in New Zealand, so they couldn’t assist with an increase to their existing loan.
Also, the client is now retired, with their only income being from their investment portfolio rents. So, they were struggling to gain a main bank solution.
Mitigants
- Clean credit and strong customer profile
- The client owns several other unencumbered properties, so had a good overall equity position
- Excellent repayment history demonstrated with their current lender
- Secured by four standard residential securities located in main centres – RVs provided were acceptable
- LVR 69%.
Solution
We were able to offer a long-term Near Prime loan with a 30 year term and an initial 5 years interest only period. Further flexibility was provided with the ability to drawdown part of the loan in the new year when the vendor finance is due to expire, which would save them interest costs on this portion of the lending in the interim.
Loan amount: $1,803,000
Interest rate: 8.15% p.a. (our Near Prime base rate with a 25 bps discount applied for 2 years)
Term: 30 years (5 year Interest Only)
Avanti fee: $10,000
Adviser fee: $5,000
Commission: 0.80% (subject to 2-year clawback term)
LVR: 69%
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.