MFAA Young Professionals and Community Panel member Bianca Patterson runs Calculated Lending, a boutique finance and mortgage brokerage in Perth. She helped a client secure a loan to build a home to accommodate her five children, four of whom have special needs.
Calculated Lending was referred to this client in August 2018. She was getting divorced and had stamped court orders to transfer the ownership of a block of land and its existing loan to her sole name within 45 days. If she could not do this, the property had to be sold to clear the existing debt.
The client had engaged a builder who had designed a special-purpose home that would accommodate her family for the long term, because it was very likely that at least one of her children would live with her forever as she would be his ongoing carer.
The client had spoken to a number of lenders and brokers and had been told that it was not possible for her to borrow what she needed as she had sole custody of her five children, and her income was made up of part-time work as a teacher, as well as a carer’s benefit from Centrelink because four of her children had special needs.
The client was unable to find a long-term rental property to suit her family’s unique needs, so I knew I had to find a solution to help her avoid selling the property in the depressed WA market. That would mean paying selling agent fees and then stamp duty on a new property in the future when she was in a position to borrow more.
Looking at the client’s income, I could see why the lenders and brokers had told her that borrowing was not possible in this case. While she was only working part-time, she would not be able to borrow the full amount that she needed.
The client let me know that she was willing to do anything to build her family a home. After checking lender policy and running some calculations, I let her know that building her family a home might only be possible as a staged approach – if she was able to return to work full-time once her youngest was in full-time schooling, as well as reduce the total cost of the build by almost 20%.
The client was committed to the process. She applied to her school for a full-time role for the following year and worked with the builder to redesign the property to reduce the total cost.
The immediate need was to have the property and loan transferred into the client’s name to meet the court order deadline. Once she was working full-time we were then able to apply to increase the loan for the construction of her home.
I researched the lenders’ policies to see which would consider the client’s Family Tax A and B income (to mitigate the living cost of her children) and also her carer’s entitlements on top of her PAYG income, as this was an income she would likely receive for the full loan term.
At the time, Commonwealth Bank was one of two lenders that would consider enough of the client’s income for her to be able to take on the property and then eventually build. CBA was able to look at the client’s situation with a common-sense approach and so was able to lend her the amount she required on the terms she needed.
I formed Calculated Lending to be a client-first, solutions-based business. We are referred many clients in difficult situations, as clients and referrers who have worked with me in the past know that I believe there is a solution to every problem.
Helping a client often involves having hard conversations, requiring a readjustment of their lifestyle and/or expectations, and then a lot of discussions with our lender partners and their credit teams. There is always a way forward if you are willing to invest the time to find it and work with the client to achieve it, no matter how long that takes.
It took two applications and over two years for me to help this client get to the construction stage. Being able to help clients like this is exactly why I became a broker and why I started the business. I think it’s important to never be too busy or label a situation as too hard, because our knowledge, experience and networks have the ability to make a genuine difference to our client’s lives.