Case Studies.

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Case Studies

First home buyers

BACKGROUND

Andrew & Lucy saved a total of $79,000 and arranged a pre-approval with their bank to buy a home for up to $650,000. They both had well-paying jobs and their lending capacity was quite high.

CHALLENGE

After searching for some time, they realised they needed to pay more for the home they wanted; their deposit was limiting their purchase price. They negotiated a purchase price of $692,500 on their dream home. After contacting the lender who had arranged their pre-approval, they were informed they needed a total of $89,000 to buy that dream home.  Borrowing at the bank’s maximum Loan to Value Ratio (LVR) 97%, the lender had arranged a loan for a total of $670,916. As they were borrowing above 80% (LVR), Lenders Mortgage Insurance (LMI) was applicable and whilst the LMI premium could be capitalised to the loan, the premium was so high it meant they needed a higher deposit. They had a $10,000 shortfall.

RESOLUTION

Andrew and Lucy met with Mint Money and explained the circumstances.  We were able to use knowledge of the market to find a lender that would allow them to borrow up to 100% of the purchase price. The $79,000 savings they had available was enough to buy the property.

First home buyers – Family security guarantee

BACKGROUND

Tom was on a mission to buy his first property.  He was looking at options for $400,000 and had saved $18,000.

CHALLENGE

To meet the bank’s 5% minimum deposit, he needed $20,000 plus an additional $16,000 for associated government fees and conveyancing costs – totalling $36,000. Tom was significantly short of this, so he resigned himself to saving further.

RESOLUTION

Tom met with Mint Money and we were able to present him with an alternative:

With sufficient equity in their home, Tom’s parents were willing to offer Tom support by way of a security guarantee. To buy the property, a limited liability mortgage was placed on Tom’s parents’ home allowing Tom to leverage off the equity.

Furthermore, some lenders allow the associated costs to also be borrowed, meaning Tom was able to borrow an additional $16,000.

Loan # 1 covered 20% of the purchase price plus associated costs ($96,000).  This loan was secured by both Tom’s new property and his parent’s property.

The second facility, Loan # 2, representing 80% of the purchase price ($320,000), was secured solely by Tom’s new investment property.

With the assistance of his parents, Tom was effectively able to borrow 104% of the purchase price, leaving his own savings to be used for other purposes – like furnishings.

The real saving here? The overall security offered reduced the Loan to Value Ratio (LVR) to below 80% and no Lenders Mortgage Insurance (LMI) was required – saving Tom over $15,000 in an insurance premium.

Mint Money was also able to leverage off the overall-equity-buffer the bank had to negotiate a lower interest rate for Tom. As Tom and his parents were conscious of having their family home securing Tom’s loan, we placed a Debt Reduction Strategy in place to help facilitate the quick release from the mortgage of Tom’s parent’s property.

First home buyers – Construction loan

BACKGROUND

A young family were buying their first home – house and land package. They required a loan to buy the land and second loan to facilitate the construction phase.

RESOLUTION

Mint Money met with these first home buyers to arrange the application and loan approval. We liaised with the valuation firm and our client’s solicitors to ensure smooth settle on the land purchase. We then liaised with the builder and assisted our client with progressive drawdown of the loan to accommodate payment of the different stages of construction.

Buying your next home – Upgraders/empty nesters

BACKGROUND

A young couple with a child and another on the way were paying a mortgage on a 2 bedroom unit and were looking to upgrade to a larger home.

CHALLENGE

These guys wanted to establish their buying power after selling their current home, which had not yet been sold.

RESOLUTION

Mint Money assisted them with getting to know their numbers; things like how much of the sale proceeds they’d have to use as a deposit and what the required residual loan amount would be to buy a larger, more expensive home. We arranged a bridging loan which enabled them to look for a new home while they awaited for a buyer for their current unit. Mint Money arranged the application, liaised with their solicitors and assisted with the signing of loan contracts. When our client sold their current unit, we again liaised with their solicitors and the bank to assist with the release of the mortgage.

Buying an investment property

BACKGROUND

A young couple with a home loan and a large portion of equity in their home were seeking to leverage off their equity to buy an investment property, so we met with them to understand their goals.

RESOLUTION

Basing our assessment on the client’s estimated value of their home and taking into account the current mortgage, we established a maximum buy price for the new investment property. Working on estimates in rental income and outgoing expenses for the new property, Mint Money assisted the clients in understanding the real cost to them on a monthly basis.

We also stress-tested this result, factoring in higher interest rates to ensure this was still affordable. Our clients were happy with their current lender so our solution was based on an application to this bank. In arranging a preapproval to buy the investment property, we also negotiated a lower interest rate for their current home loan.

We arranged:

  • a free valuation on their current home to establish their equity position
  • the application
  • required liaison with our client’s solicitors
  • assistance with the signing of loan contracts
  • all the banking facilities required to accommodate not only their personal everyday requirements but also their new investment lending structure

Buying an investment property via a SMSF (Self-Managed Superannuation Fund)

BACKGROUND

A Barrister in his 50s was looking to utilise his superannuation funds to buy an investment property.

RESOLUTION

By working closely with our client’s accountant and financial planner, we established a lending strategy. Mint Money arranged the application and liaised with the bank to achieve a preapproval for the required loan amount. When the property was located, we arranged the valuation, submitting this to the lender to reach an unconditional loan status. We assisted with the signing of loan contracts and liaised with the client’s solicitors to ensure a smooth settlement process.

Refinance/Debt Consolidation

BACKGROUND

Jenny, a single mother, was meeting her debt requirements but was caught in the rat race and couldn’t get ahead (let alone save for a holiday). She was paying off a $415,000 home loan, a $4,500 credit card, a $13,000 credit card, a $20,000 personal loan, a $7,500 car loan and a debt to a family member. Not only was she in need of a holiday, her home was in dire need of extensions.

RESOLUTION

We consolidated all her loans into 1 facility and managed to release an extra $50,000 to renovate her home. In providing this funding, we saved Jenny $3,427 per month. She was finally able to upgrade her home and save for a holiday – all at a lower interest rate than she’d been paying.

How?  Mint Money arranged a free valuation on her home to establish the equity position. We organised the application, liaised with the bank to have the loan approved and assisted with the signing of loan contracts. We also assisted in arranging all the banking facilities required.

Refinance & product switch

BACKGROUND

A young couple with a large home loan were seeking to switch their loan from principal and interest repayments to Interest only repayments.

CHALLENGE

As we reviewed their home loan to facilitate the switch of repayment types, it became evident the interest rate was too high.

SOLUTION

Mint Money met with the couple, established their banking needs and long term financial goals. We then reviewed other lenders in the market, their loan features and the interest rates on offer. Our clients were keen to refinance to another lender given their current lender had not offered a rate reduction in line with the current market. In refinancing to another lender, we arranged a free valuation on the client’s home, negotiated a lower rate than advertised in the market and fee waivers and facilitated the application. Overall, our clients walked away with a tailored the loan structure designed to accommodate their future plans.

Car loans and equipment finance

BACKGROUND

A woman was looking to purchase a new motor vehicle for personal purposes, from a car yard.

CHALLENGE

Having found the car she wanted, the woman considered a personal loan from her bank – until she discovered the high interest rates. She’d also been offered finance from the car yard but wasn’t sure if she was getting a good deal or not; she requested a review of the car loan terms offered by the car yard and it was quickly established that despite the low advertised rates, the commissions the car yard were charging were too high.

SOLUTION

Mint Money stepped in to arrange quotes from other major lenders in the market, giving our client choice. We assisted with the application and liaised with the lender to have the application approved. We assisted with the execution of loan contracts and the payment of the dealer invoice.

Business Chattel Mortgage/Hire Purchase

BACKGROUND

1. A plumber wanted pre-approval ahead of commencing the search for a new van for his business.

2. This operator of an earth-moving business was looking to purchase machinery.

SOLUTION

Mint Money arranged quotes from other major lenders in the market and gave these clients choice. We assisted with the application and liaised with the lender to have the application approved. We assisted with the execution of loan contracts and the payment of the dealer invoice.

Business finance

BACKGROUND

A team in their 50s were on the search for finance to purchase a Post Office when they approached Mint Money.

SOLUTION

We reviewed their debt position to establish options and found there was equity in their home which was sufficient to borrow 80% of funds required. For the balance, we arranged a business loan which incorporated a fixed & floating charge over the post office. In positioning our clients’ eligibility for the business loan, we highlighted their experience in managing a business, experience working in various post offices and the strength of the business being purchased. For the finance, we dealt directly with the franchise department of a major bank and secured competitive terms on our clients’ behalf.

Commercial property finance

BACKGROUND

A couple in their 50s were given the opportunity to purchase the premises they were renting and running a liquor shop from.

SOLUTION

Mint Money reviewed their current debt position to establish options and found there was equity in their home that was sufficient to borrow 100% of the funds required, plus associated costs. As the clients offered their home as collateral, we were able to secure funding at residential lending terms which greatly reduced the client’s monthly commitment.

Buying a commercial property via a SMSF (Self-Managed Superannuation Fund)

BACKGROUND

Some successful transport company operators from Sydney required a second depot in Victoria. Their financial planner advised them to utilise their superannuation funds to buy a commercial dwelling.

SOLUTION

Working closely with the clients’ accountant and financial planner, we established a lending strategy and loan structure. We presented funding options from the top 5 major banks as per the clients’ request. We arranged the application and liaised with the bank to achieve a pre-approval for the required loan amount and when the property was located, we liaised with the business banker to arrange the valuation and sought the unconditional approval of the finance. We assisted with the signing of loan contracts and liaised with the clients’ solicitors to ensure a smooth settlement process.

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