Online Clothing Retailer Buying First Home

Success Factors

  • Diligently arranging a Family Guarantee for a client that only had a 10% deposit, with no additional savings for stamp duty
  • Continually managing the expectations of all parties, both the Clients and the Guarantor, by being transparent and communicating frequently on progress
  • Acting upon each milestone of the application process efficiently – we finalised all supporting documents and information, and we achieved a turnaround time of 3 business days to produce the application and compliance forms where the client had made an offer on a property they really liked prior to pre-approval
  • Ensuring both the purchase application and the Guarantor’s refinance applications were simultaneously being assessed

The Situation

Our clients had recently moved from Sydney to Hobart where housing is more affordable. Amidst all the moving chaos, our client had to also run her own business, an online retail clothing brand, whilst her partner, employed on a casual basis, had just been offered a full-time permanent role in the Hospitality industry.

The couple were looking at Hobart properties between $400,000 to $450,000 to be their own home. However due to the interstate relocation and cash flow needed in running a business, they had only $40,000 remaining in savings. They needed a trusted Finance Broker to walk them through the Mortgage process and offer deposit solutions.

The Challenges

  • Following SF Capital’s initial assessment and presentation, our clients put in an offer on a house – without a pre-approval 
  • Her partner’s new employment income was required for servicing but he had not yet started his employment at the time of our initial meeting 
  • Their savings were low as they had just relocated from Sydney to Tasmania – their savings had been used towards the relocation and purchase of new items in their rented property
  • Our client’s mother had agreed to provide their property as an additional security in lieu of the 20% deposit and transaction fees. However, a second Mortgage was not allowed on their existing loan which meant we needed additional time to refinance the additional security so that a family guarantee could be arranged 
  • Our client is a sole trader and the business was continuously growing and doubled in profit over the last 2 years however the accountant was prepared to complete the tax return so that an application could be lodged using the latest year’s income

The Results

Our clients had diligently responded with all supporting documents allowing us to provide a fast turnaround on an initial assessment on their borrowing capacity.

We followed this up with a face to face meeting in which our Managing Director personally flew to Hobart to present to the First Home Buyers (conveniently, there was a conference happening at the same time!). This presentation offered not only a deposit solution but education around the mortgage process which the clients really appreciated.

Our clients then informed us that their parents were happy to offer their home in support of their first property purchase. Their property was being provided as an additional security in lieu of the 20% deposit and transaction fees.

Subsequently our clients put in an offer on a property which was accepted. We then had to move quickly to execute an application.

The urgency was becoming more evident, and we needed to ensure the additional application was in place to refinance the parents property as their existing mortgagee would not allow a second mortgage.

Having been notified of the purchase we immediately established a relationship with:

  • The guarantor (mother) to understand her financial position and availability in offering their home as an additional security
  • The Client’s Accountant and Bookkeeper to collect interim financials
  • The Client’s Solicitor so we could obtain the purchase contract and understand any special conditions

Being able to understand the Clients and Guarantor’s financial position in more detail we were able to present lenders which met their needs and objectives. Our detailed breakdown of options allowed the Clients and the Guarantor to make an informed decision on lender and the product to proceed with.

Once the Lender had been decided, the Clients and Guarantor were quick to return all documents, allowing a Submission in the same week.

We had presented the clients extremely well and hence the only condition which returned were on utilising the Clients latest years financials which we had expected and prepared the clients for. The condition was resolved in a diligent manner with the assistance of their accountant, which we had built a relationship with earlier on, by requesting the latest financials be finalised and the Notice of Assessment requested so it could be sent to the bank.

Formal Approval and Loan Documents were issued shortly after which we immediately acted upon with the Clients and Guarantor.

One other hurdle was we had to manage was to make sure the Guarantor application settled simultaneously or prior to the purchase application. Even though we were well prepared before settlement, the Discharging Bank needed time to prepare the discharge of the Guarantor’s home. We continually followed up with Discharging Bank to ensure settlement took place in advance, and which did!

With our persistent follow up and oversight of the settlement process, the Clients purchase settled smoothly with no delay and picked up the keys on the same day. The happy couple has now moved into their first home together!

WHO TO TALK TO

Priscilla Tan
Operations Manager
Luke Xie
Finance Broker