Since our clients had agreed with a Bridging Loan, we needed the current property refinanced to the new lender. Due to their property portfolio it was extremely important to tightly document all required supporting documents and information that the lender required.
We then presented the deal strongly to the lender whilst carefully detailing the late loan repayments which were out of character for the clients. In addition to the explanation, we presented their savings at the time which exceeded $500K showing clients had more than sufficient funds to cover these repayments.
Formal Approval was issued two weeks from loan submission and we were on track for settlement. Two days prior to settlement, clients’ existing lender informed us that the current property was cross collateralised with their investment property.
Due to time constraints we knew the most efficient way forward would be to substitute existing property with an unencumbered investment property. We proceeded with this strategy immediately and requested a 7 day extension to settlement.
We were able to order valuation and substitute the investment property, allowing settlement to occur without penalty interest to the client.
During the application, clients also took on our advice to list the property as soon as possible. Within 3 months the client sold their home and discharged the bridging loan, avoiding a massive interest bill.