Background
A single 30-year-old looking to purchase his first owner-occupied property. He was moving from a main city and looking to purchase in his hometown (a provincial city).
Challenge
Small historic credit issues that came about while he was establishing his business several years ago and the fact that he was looking to relocate meant that main bank lenders were not willing to support this client with funding.
Mitigants
- Self-employed young professional (over 12 months)
- Business could be conducted remotely so income would not be affected by the move
- Good account conduct evidenced
- Building up his business, with it growing year-on-year
- Income evidenced from income returns
- Credit defaults – historic, under $1,200 and all paid
- Acceptable explanation from client as to why the credit defaults had occurred and what has now changed
- Good equity position with 25% genuine savings.
Solution
We were comfortable supporting this client with a long-term (Near Prime) first mortgage with our spring campaign pricing of 8.90% p.a (25 bps discount off our base rate of 9.15% p.a. for two years from settlement).
A great opportunity for a young person to get into their first home.
Loan amount: $280,980
Interest rate: Spring campaign 8.90% p.a. (9.15% p.a. with a 25 bps discount for 2 years)
Term: 30-year principal and interest payments
Avanti fee: $705
Adviser fee: $2,775
Commission: 0.80% of the loan amount (subject to clawback if repaid in full within 24 months)
LVR: 75%
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.