Case Study

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Client

Residential Full Doc- Refinance with cash out

Applicants were looking to refinance their existing mortgage of $460,000 secured against their owner-occupied residential property valued at $750,000. They also needed to repay a tax debt of $80,000, additionally they required cash out of $60,000 for small home renovations and a family holiday.

 

Solution: Loan was approved using our residential full doc product at 80% LVR under our CLEAR risk grade with the existing mortgage, tax liability and all defaults being paid as part of settlement proceeds, with the balance deposited to the borrower’s bank account for their renovations and family holiday

Residential SMSF- Purchase

Applicants had recently set up a SMSF with the intention to purchase an existing 3 bedroom house, in metropolitan Melbourne, valued at $500,000. Applicants had an existing superannuation balance of $75,000 and had each made additional contributions of $25,000 into the fund this financial year. As the contributions were made in a lump is, rather than periodical, serviceability was looked at outside the SMSF in its own right, and was based on the company’s performance as well as the applicants’ ability to make regular contributions to their SMSF. Servicing also took into account applicants’ living expense and personal liabilities.

 

Solution: Loan was approved using our Residential SMSF product at 80% LVR

Residential Construction- Builder Owner

Applicant, a registered builder had previously built and sold two houses and was now seeking funding to construct an investment property in Queensland. Applicant’s credit file revealed 2 small defaults. Applicant was able t o provide a fixed price, fixed time building contract from his building company for $750,000 and already owned the land (valued at $250,000)

 

Solution: Loan was approved using our residential construction product at 75% LVR (based on end value), with income verification met by an accountant’s certification and borrower repayment declaration

Development Finance- 4 units

The applicant, a registered builder was looking to construct 4 townhouses in a metropolitan Brisbane suburb. A construction loan of $1,920,000 was sought by the applicant who intended retain ownership of the prosperities for investment and rent them out on completion. A building contract had been entered into for $1,300,000 to construct on land valued at $1,100,000 that had an existing mortgage of $250,000 in place.

 

Solution: Loan was approved and construction project funded by La Trobe Financial under our development Finance with no further ash input from the applicants and no-pre-sale requirement, allowing the developer to hold the stock on completion. Subsequently, a pre-approval was provided for the residual stock facility at the initial application stage

Commercial Lease Doc - Refinance with cash out for investment

Applicants own a commercial premises valued at $1,200,000 that is leased to a retail outlet for $80.000 p.a. with 3 years remaining. They have a current debt outstanding to a major bank of $650,000 secured by this property. Applicants are looking to access equity $260,000 total in order to purchase additional stock for their own business ($170,000) and to consolidate an outstanding ATO debt of $90,000

 

Solution: The monthly rental income received covered the proposed monthly loan repayment commitment by 1.22x (ICR), and therefore Loan was approved at $910,000 (70% LVR). This also allowed for the refinance and equity release under our commercial LeaseDoc product by simply verifying serviceability from the Lease Agreement already in place.

 

Commercial Lite-Doc-Refinance with cash out for business

Applicants operate their business from their own commercial premises and on advice from their accountant were seeking funding to refinance their existing commercial loan with loan with the intention to access equity to buy additional stock in readiness for a trade fair.

Additionally, they required cash out to clear current trade debtors in order to free up business working capital and set up a debtors finance facility. Applicant’s credit file revealed a paid default due to dispute over trade account. Applicant’s financial had not yet been completed so income was vertified via Accountant’s declaration and a borrower repayment declaration.

 

Solution: Loan was approved under our commercial Lite Doc product at 70% LVR under our PRIME risk grade with a 25 years loan term with no periodical reviews.

 

Residential-Rural Full Doc

Applicants were looking to rerual residential property in the hunter valley. They had incurred a credit card default of $24,000 due to their child being injured resulting in large medical bills. Additionally they required cash out to upgrade their kitchen. The Applicants confirmed the non-income producing nature of the property and advised it was on owner occupied home with a large shed housing chickens. Both applicants are PAYG and employed locally.

 

Solution: Loan was approved under our residential-Rural Full Doc product at 75% LVR with default paid as part off settlement proceeds.

Parent to Child (P2C)

Applicant and her partner wated to purchase their first home however only had enough to cover a 5% deposit plus costs, and between them they had 3 small defaults on their credit file therefore limiting their borrowing capacity at 95% LVR with Lenders Mortgage Insurance.

The homebuyer’s parents were happy to assist their daughter and her partner however were reluctant to provide personal grantees and wanted to protect the additional 20% they were providing.

 

Solution: We provided the applicants with our residential Full Doc Loan  to 80% LVR (on 1st mortgage basis), and then provided a further parent to child (P2C) Loan to 100% LVR utilising the parents’20% contribution on a peer-to-peer basis, secured by a registered 2nd mortgage to facilitate the purchase. There were no guarantees provided by the parents, and their 20% contribution was invested by Green & Gold, secured by way of a 2nd registered mortgage over the applicant’s property to protect their interest.

Aged Care

Application lodged by enduring Power of Attorney (POA) who was seeking funds to place elder mother, who was ill and living alone, into an aged Cared facility without selling the family home. The RAD ( refundable accommodation deposit) required was $660,000 and a further $70,000 cash out to complete renovations to the property in order to assist with the sale of the property at a later point in time. The total loan required was $730,000 and the current value of the property was $1,500,000

 

Solution: Loan was approved using our Aged Care Loan for $730,000 with interest repayment capitalising for the first five year.

Full Service Invoice Discounting

There is a huge amount of steel and concrete used in larger construction projects across Australia. With the skyline of Sydney changing rapidly there are plenty of opportunities for construction businesses. Our client has a business supplying rebars and also labour to install the steel prior to the concrete pour. Working with the leading building companies nationally, the business has a range of suppliers. Whilst good for business, this does also mean that there are some challenges in handling accounts payable and receivables. With a current arrangement through their local accountant, the business owner could see this was not scalable.

Solution: Various invoicing options could be provided for this business because payments are invoiced on job completion and not for work in progress. A full service facility was recommended to enable accounts and collections to be provided as a service helping as the business expands. Trade credit insurance was put in place to mitigate risk on the debtor book. This business now has a facility in place and is looking continue to expand with new opportunities and secure lines of credit.

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