June and Geoff – not their real names – were referred to us at Clever Finance Solutions. They were looking to do some renovations and had become frustrated, trying to get a loan to finance the renovation.

Banks for better or for worse tend to only want to do what I’d call ‘meat and potatoes’ loans. Very simple and very straight forward. You tick their boxes, and they can help you. As soon as they can’t tick their boxes, your situation gets complicated very fast.

By way of background, June works as a school assistant principal who had been working part-time and recently went back to full time, Geoff is a self-employed consultant. With three children, their home was a bit cramped, so they wanted to do a couple hundred thousand dollars’ worth of renovations.

They could easily afford the loan based on their income if their situation were simple; unfortunately, their situation was anything but simple.

Their home has a caveat over it by the state government as it is reserved as a road corridor. Try as they might June and Geoff have not been able to get the government to remove the caveat even though they have no plans in the short term or the long term to develop the road corridor.

Sadly for Geoff and June, this means that they can’t get a mortgage lodged on the title of the property, which is the typical way to pay for a renovation to your home.

Unable to get a mortgage over their home they can’t get finance themselves, so they had no way to fund the renovations. Geoff and June had tried their bank and another broker, who was a family friend with no success. It was a very complicated and ‘ab-normal’ situation.

Clever Finance Steps In To Save The Day

During their meeting with Barry, we were able to formulate a plan. It was complicated but workable. Geoff’s retired father has an investment property which as it turned out, he was happy to let Geoff and June use as security for a loan.

To make it all happen:

  • Geoff had to be put on the title (as a partial owner) of his dad’s investment property and pay the stamp duty associated.
  • We had to explain to Geoff’s dad what he was liable for and what could happen if something went wrong and also make sure Geoff’s parents home was not at risk.
  • We had to get the rest of the family on-board with the changes we made to the title because technically Geoff now owned part of their inheritance. There had to change some of the wills accordingly to make sure everything was fair.
  • Had to show the lender the benefits to all parties on loan, to satisfy co-borrowers requirements under “Banking code of Practise.”
  • Geoff’s dad had three pieces of identification with three different names; we had to get a common name to comply with “anti-money laundering requirements.”

It took months working through scenarios and having meetings with clients and coordinating people to get over the line, but we got there. June and Geoff got the loan for their renovations at a reasonable interest rate and expect to start renovations in the next month. June is very excited as she has been waiting to get these renovations for years.

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