Getting tough deals across the line

by Adam Smith12 Jan 2016

The solution:
The broker contacted Bluestone Mortgages and explained the borrower’s situation.  Bluestone was able to come to the rescue with its innovative new product launched to help self-employed borrowers who have only been in business a short time - from three months.  Business Easy is a fresh approach to the specialist lending market, providing brokers with real solutions for their customers who are looking to purchase a new home or refinance their existing home loan(s) to access equity that can be used as additional capital in their business.

As long as the borrower can demonstrate a good cash flow and revenue through their business to support the serviceability of the loan, they can secure finance through Bluestone’s Business Easy product.  In this instance, the borrower was able to show Bluestone that he had the ability to service the loan by submitting his business bank statements, which showed income derived from the construction company he sub-contracted for on a regular basis.

The takeaway:
By managing the expectations of the borrower over time the broker will be able to refinance into a prime loan when he has a longer employment history and an improved credit position.

The borrower was extremely happy with the solution provided as he had been unable to find someone who could help.  As such he will be a great advocate for the broker in the coming years.  By working with the customer to find a solution and providing support for the entire process from application through to settlement, the broker has effectively created a new income stream for the future and likely a client for life.

La Trobe Financial
The scenario:

Self-employed applicants had been operating their business for 3 years and were looking to expand by modifying the business premises and purchasing new stock.  Applicants required $120,000 to modify the premises and $80,000 for additional stock, giving a total “cash-out” requirement of $200,000.

To facilitate this, the applicants were looking to access equity by refinancing their owner-occupied home (currently owing $340,000), borrowing 90% of an expected value of $600,000 (Loan Amount of $540,000) to provide them with the $200,000 they required.

Following lodgement of the application with a major bank, the applicants encountered two challenges: The valuation of their owner occupied residential property came in lower than expected at $575,000, and one of the applicants had three unpaid defaults totalling $26,000 and an ATO debt of $25,000 relating to unpaid tax and debts originating from an extended period off work for the applicant to treat a serious illness two years prior.

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