Personal loans can provide the missing link when borrowers need extra ﬁnancial support to achieve their homeownership goal. Broker Andrew Paterson of Geelong’s Aussiewide Financial Services found that NOW Finance offered the ideal solution for his clients.
As a licensed mortgage broker with over eight years’ experience, Andrew Paterson is well placed to guide clients through ﬁnancing and purchasing property. Recently his expertise was called on to help a young couple realise the dream of buying their ﬁrst home, as he explains below.
I initially met with my customers – a married couple with two young children – on the recommendation of their builder.
Their dilemma was a familiar one. Then renting for $420 per week, the pair hoped to secure a house and land package in the local area for $550,000. However, while they were earning a solid combined income of $150,000 per annum, on the downside they had limited savings of just $5,000 to put towards a home loan deposit, and they were not optimistic about obtaining the bank’s approval to buy their ﬁrst home.
I investigated how the couple could ﬁ nance their initial home loan deposit. The provision of a limited guarantee by their parents to support their mortgage application, plus their eligibility for the ﬁrst home buyers guarantee and their stamp duty exemption as ﬁrst home buyers of a property for under $600,000, ensured that they overcame this issue.
However, in my ﬁrst meeting with the clients, I quickly identiﬁed their next – and biggest – challenge. A car loan and two credit cards, each with outstanding balances, left them with an ongoing combined commitment of $980 per month, which, on the face of it, suggested they might struggle to service a mortgage for the full amount they were seeking.
To get the couple back on ﬁnancial track and help them achieve their goal, I proposed a two-step process.
Firstly, I reached out to Heath Mackay of NOW Finance, a specialist provider of personal loans for consumers looking for convenient, value-for-money, easy and hassle-free personal ﬁnance solutions to help them achieve their goals and maintain ﬁnancial control.
In consultation with Mackay, I helped the couple apply for a $25,495 personal loan at 11.95% interest for 84 months, to enable them to consolidate three of their existing payment obligations. Approved and settled within just 24 hours, the personal loan with NOW Finance reduced their monthly commitment from $980 to just $462 per month. In turn, this freed up $512 per month for the couple to put towards their home loan with the Bank of Melbourne.
The bank then approved an application for the entire amount sought by the couple at a competitive rate of interest, supported by the limited guarantee provided by the couple’s parents, and without the imposition of any additional requirements like the need to take out lenders mortgage insurance, which was fantastic.
Deﬁnitely the best part of the whole process was sharing the good news with the clients. They simply couldn’t believe it when they were told their loan had been approved. On the face of it, they had thought they were years away from owning their own home. But as the deal I was able to negotiate with the help of NOW Finance proved, sometimes it takes multiple steps to arrive at the perfect solution.
Construction was completed in August, and the couple are now happily settled into their ﬁrst home. Even better, a rising property market in Geelong has seen the value of their property increase by $100,000 to $650,000 since they ﬁrst purchased their house and land package in October 2020.
We’re a solutions-based business, and we really pride ourselves on working with lenders like NOW Finance to provide clients with outcomes they are happy with. That means taking the time to really look at a client’s particular circumstances and consider how we can structure a loan and utilise complementary products to bring their dreams to fruition. In this instance, without access to NOW Finance debt consolidation, the clients would still be renting.
In the words of Mackay: “As this situation clearly demonstrated, it’s important not to simply take things at face value and assume a transaction cannot be done. It’s always worth digging a little deeper and looking outside the square to seek the right solution for your client, recognising that sometimes it might take a few additional steps to get there. Here, this involved restructuring and consolidating the clients’ existing commitments via one facility to allow them to successfully apply for another, conﬁ dent that they would be able to meet their mortgage repayments comfortably.”