In order to approve and settle the client’s construction loan, we took the following steps:
- We educated the client and worked together with the builder to draft a fixed price building contract that would meet the lenders requirements
- We restructured his other investment property loan so it could be refinanced with an extra cash out over to the same lender that was providing the construction loan. This would supplement the as if complete valuation shortfall
- We conducted a detailed assessment of three years of financial statements – FY19, FY20, FY21 to present an analysis that the annualised YTD FY21 income was on track to exceed that of FY20 and FY19, net of JobKeeper and Cashflow
- We were able to do this across all four business entities, meaning we did analyses on 12 sets of financial statements (P&L and Balance Sheet)
- When we helped the client with a previous loan application we were able to achieve a policy exception to apportion the business loan repayments. This was in line with the business income since he was a 50% owner. For this application, we leveraged the previous file notes in order to direct the new assessor to provide the policy exception again
- The client then met sufficient borrowing capacity to allow the LVR to increase to 90% and thus make up for the valuation shortfall. He otherwise did not have to put more deposit than originally planned.