Our clients reached out to us to refinance their investment property in Queensland.
The male applicant is a Chartered Accountant working as a CFO of a major retail chain, while the female applicant is a restaurant manager. They have one dependent.
Their goal was to achieve a more competitive interest rate on the existing mortgage as well as take a cash out towards the deposit for the next investment property purchase, also in Queensland.
The clients were after a bank that would accept the existing investment property as the security for the mortgage. Initially, ANZ would not accept it because it was being rented out to a company.
The new investment property was purchased as a vacant land lot with a fixed priced building contract on top. However, the combined cost of the two components exceeded the valuation that subsequently came in.
The clients qualify for the accounting professional LMI waiver and achieve 90% LVR, however, with the lower valuation, they needed to find sufficient funds to complete the second purchase.
The two loans were not to settle simultaneously. As their broker, we managed both loan applications for the client and in the end were able to submit these to Westpac who accepted the first security property and approved 90% LVR for both loans.
In addition to the cash out from the refinance and funds in the offset account, the clients also sold $200K in listed shares in order to have the funds to complete the purchase.
The loan terms were both for 30 years, with the initial 5 years on interest only repayments.
The clients were able to switch lenders to achieve a more competitive interest rate for the first property, pay a lower repayment amount after refinancing to interest only.
They also were able to secure funds to settle the second property and thus have construction begin immediately in time for it to be rented out by the end of the year.