Case Studies

Borrowing more than 100% of Property Valuation

Chris and Belinda were both working in stressful emergency services roles and were long term renters of an inner-city town-house.

Chris and Belinda had always harboured a dream to buy a small house or spacious unit in Bayside Melbourne close to a swimming beach but as their lifestyles did not allow for them to save enough money for a deposit to buy a property, the dream remained just that, a dream.

One Saturday morning, on an impulse, they walked into the Oz Lend office, and asked if we could help them with a car loan. After an in-depth discussion with them regarding their financial situation and plans, we uncovered what their dream was, and it wasn’t buying a new car.

Chris indicated that his parents wanted to assist he and Belinda to become homeowners, but were asset rich but cash poor, and couldn’t help them with funds for a deposit.

As the parents concerned had a high level of equity in their own home, Chris was requested to ask them if they would be willing to use their property as security for part of any loan they took out to achieve their dream of owning a Bayside property.

After meeting with the parents and explaining the details of the proposal, their obligations as Guarantors if a loan was granted, and advising them to obtain independent legal and financial advice before agreeing, the go ahead was received, and Chris and Belinda started their search for a suitable property.

Chris and Belinda eventually purchased their dream home for $620,000 and then required a home loan of $657,000 to effect full settlement on the property.

This amount represented 106% of the purchase price of the property. To achieve approval for this level of borrowing, Oz Lend successfully structured two loans as follows; with Chris and Belinda assuming responsibility for the full repayment of both loans.

Loan 1 – $161,200 (26% of the purchase price) secured by parent’s property via a 2nd Registered Mortgage).

Loan 2 – $496,000 (80% of the purchase price – no mortgage insurance).

Whilst realising their dream via an almost accidental encounter with Oz Lend was fortuitous, Chris and Belinda will be forever grateful to Chris’s parents and to Oz Lend for making it all happen.

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