No Savings
Feb 15th, 2018 • Industry News
No Savings?
A family pledge loan facility could help you buy your first home sooner Says Shaun Director of Approved All Loans Group
Young couple David and Julie were keen to start paying off their own home rather than paying rent, but had no savings. Here’s how they bought their first property.
David and Julie Smith were wondering why they were paying off their landlord’s mortgage instead of their own, but they didn’t have the savings or financial history to convince a lender to give them a mortgage.
After being declined by two lenders, one a big bank and the other a smaller lender that they thought they would have luck with, they contacted Approved All Loans Group.
“During my initial discussions with David on the telephone, I asked him several questions to help me put the pieces of his jigsaw puzzle together,” says the Shaun Howie Director of Approved All Loans Group. “And, on paper, it certainly didn’t look like a deal.”
As well as the lack of savings, the couple had a couple of other problems standing between them and a strong application: David had recently changed his employment and he had a small, paid default on his credit file.
At their first meeting with Shaun, which was held at David’s parents’ home, they discussed their needs and objectives, and mulled over whether the only option for them was to create a savings plan in order to purchase at a later date.
“The parents sat in the interview and wanted a solution,” says David and Julie’s finance broker. “It became apparent that a family pledge loan facility may be an option.”
This would involve David’s parents offering their home as collateral security.
“However they already had a small mortgage on their property, so a refinance of this loan was required,” Shaun explains.
After seeking their own legal advice, David’s parents refinanced through Approved All Loans group at a lower interest rate. As well as being able to deal with a local finance broker, they also eliminated fees they had been paying by moving onto a more appropriate loan type for their situation.
“The family pledge loan facility meant David and Julie could borrow the full purchase price and other associated costs, without paying a $25,000 lenders’ mortgage insurance premium,” says Shaun from Approved All Loans Group. “David and Julie are now out of their rental, and have moved into their new home.”
Talk to Approved All Loans Group finance broker who can help you own your first home sooner.
*Clients’ names have been changed.
← Return to Blog.png)
.png)
.png)