Customer Goal
A couple hoped to unlock the equity in their home to fund the construction of a new house on land they had recently purchased. This new build was a long-held dream, but their excitement quickly turned into frustration when several brokers presented them with high interest rates. Due to their modest income and the husband’s age—approaching retirement—lenders saw them as high-risk, which severely limited their options. The couple felt trapped between settling for loans with unmanageable rates and delaying their plans indefinitely. They feared that these high-interest loans could jeopardize their financial stability, making their dream seem out of reach.
Problems
The couple faced significant challenges in securing finance to build their home:
- The primary applicant (MA) had recently left a PAYG role to start a business, making lenders cautious, especially as he was nearing retirement at age 50.
- The secondary applicant (FA) could not service the loan on her PAYG income alone.
- Previous brokers had recommended Tier 2/3 lenders with very high interest rates, which would have made the loan less affordable
Solution
We took a different approach:
- We found a Tier 1 lender that was willing to consider just one year’s financials from MA’s new business. This was crucial, as it meant the couple could avoid the higher interest rates of Tier 2/3 lenders and secure a more stable loan product.
- Additionally, we developed a strategy that allowed the lender to take future rental income from the completed property into account.
- This solution provided the couple with access to competitive interest rates, making their goal of building their home much more attainable.
Outcome
Thanks to this approach, the couple secured a loan that met their needs without the burden of a high interest rate. They are now moving forward with the construction of their new home, confident in their financial position.
