Everyone hopes their loan application process is going to be quick and easy, and for some people it is. They are straightforward applicants—full-time employees working for someone else, and have a 20% deposit or more. However, the majority of the population are not cookie-cutter applicants, and this next client certainly isn’t.
Let’s meet Shane and Deborah:
Shane and Deborah run their own business and employ a number of people. They have purchased several investment properties in quick succession over the last year as part of their retirement goal. Shane and Deborah were then told by their existing lender that they couldn’t purchase any more properties as they won’t have enough income to service their debts and other expenses if they did. The other problem was that their existing lender had cross collateralised all of their properties, making it difficult to change the existing setup and extract more equity to use for deposits for the new properties.
When our Director Barry first spoke to Shane and Deborah, they quoted their “taxable income” from the tax return, which is what the lender had been using as an indicator of their ability to service their loan. Barry asked to see their full tax returns and financials, and identified items that could be “added back” to increase the overall income that could be used.
Once this new income was used, combined with an application to a lender who would treat Shane and Deborah’s existing debts favourably, they were able to buy two more investment properties. This means that the total number of properties that Shane and Deborah have is now eight, all across Australia and all purchased in 12 months. This is a large piece of their retirement goal that has been reached and secured for their financial future. Without Barry’s clever thinking, Shane and Deborah would have had to wait several years to purchase any more properties, putting their retirement plan at risk of falling short of where they need to be.
If you want assistance and guidance in terms of loan decision-making and making the right financial choices in general, don’t hesitate to give us a call. We’d be more than willing to help you out!
*Names and personal details have been changed for privacy reasons.