A Quick Overview
| Details | Description |
|---|---|
| Customer Goal | To settle a property within 3 months with a competitive interest rate |
| Problem | Had to settle a property within 90 days |
| Loan Amount | $1,075,642 |
| Security | $1,200,000 |
| LVR and Term | 89.64% Loan-to-Value-Ratio(LVR), 30-years loan term |
| Income | $154,777 p.a. |
| Solution | Managed to settle at a competitive rate |
The Backstory
Amy is an IT professional and Adam is a manager. The couple were living in a rental space with their child when they decided it was time for them to stop paying rent and get their own home. Their jobs allowed them to live well and they were earning well. They had some savings and were looking at a house in the range of $1 million.
Unchartered Waters: First Time Buying A Home
Amy and Adam are a full-time working couple with a child. Their lifestyle left them with little time to shop around for the best rate. They had never bought a house before and lacked any insights into the property market or the borrowing market in general. This left them unsure of a lot of things. What they were sure about was that they wanted to get their dream home as quickly as possible. They had heard that the Reserve Bank of Australia was expected to raise the cash rate to combat inflation, which meant interest rates were going to rise, but they had set their minds on finding a home within three months. They turned to the internet for information.
Home Loan Rate Rose But Borrowing Power Did Not Decline
Amy and Adam came across Home Loan Experts’ website while looking for more information about the real-estate industry. We connected them with one of our specialist mortgage brokers, Kenneth Cheah. Since the couple was looking to purchase a home in a short amount of time, Kenneth and his team worked quickly to find the best loan options for them.
Below is a list of things our broker and his team did to help the couple get approved for the home loan:
- Finding the suitable loan for their situation: After assessment, the team managed to find three lenders that matched the clients’ needs. Since they hadn’t found a property yet, Kenneth was able to get them pre-approved for a loan at a competitive rate of 2.29%, giving them 90 days to find their ideal home.
- Compiled documents and filled out the application: After consultation with Kenneth, the couple knew exactly which documents they needed to provide so that a proper assessment could be done. Because they were new to buying property, Amy and Adam found the list that Kenneth and his team provided was a great help to them. Additionally, our loan processing specialist filed the loan application with the lender on their behalf. This saved them a lot of time.
- Assessing financial circumstances: The team conducted a credit assessment, verified the couple’s assets, income and employment status, to properly evaluate the clients’ borrowing power and eligibility.
- Convinced the lender not to lower their borrowing power when interest rates rose: Just as had been forecast, the Reserve Bank of Australia increased the cash rate. This would cause home loan interest rates to rise. It happened three times while the couple’s loan was being processed. Fortunately, our broker was able to convince the lender that our clients were high earners and had enough deposit that the increase in interest rates should not affect their borrowing power much. He also convinced the lender to let the couple proceed without having to reapply for the loan.
- Negotiated a more competitive interest rate: Even though interest rates did rise, our broker was able to negotiate the most competitive rate available in the market with the same lender. So, even though the client had to agree to pay more interest than previously agreed upon, it still was the lowest interest rate they could have gotten in the current market.
A Home To Call Their Own
Amy and Adam were able to get a settlement on their home loan quickly due to the rapid actions Kenneth and his team took. Being busy full-time workers, it was convenient for them to use a mortgage broker with a wealth of knowledge and expertise. With the help of Kenneth and his team, they were able to secure a loan of $1,075,642 at 3.89% – a rate they would not have been able to access on their own. This allowed them to buy a home worth $1,200,000.
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