Young couple Chris and Kate 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. Chris and Kate 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 their local MFAA Approved mortgage broker.
“During my initial discussions with Chris on the telephone, I asked him several questions to help me put the pieces of his jigsaw puzzle together,” says the mortgage broker. “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: Chris had recently changed his employment and he had a small, paid default on his credit file.
At their first meeting with their mortgage broker, which was held at Chris’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 Chris and Kate’s mortgage broker. “It became apparent that a family pledge loan facility may be an option.”
This would involve Chris’s parents offering their home as collateral security. “However they already had a small interstate mortgage on their property, so a refinance of this loan was required,” their mortgage broker explains.
After seeking their own legal advice, Chris’s parents refinanced through Sam and Kate’s mortgage broker at a lower interest rate. As well as being able to deal with a local mortgage 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 Chris and Kate could borrow the full purchase price and other associated costs, without paying a $25,000 lenders’ mortgage insurance
For more information on a Darwin home loan from a Darwin mortgage broker call today on 0447 499 794. You can access our Mortgage Calculator here.