The clients
Ronald (named after Maccas) and Pippa are a couple that were renting together but keen to buy their first property together near Sydney, NSW. They were both earning good salaries of $120K and $135K respectively. They found a perfect first home valued at $940,000 close to Pippa’s job.
Problems
- As they were paying high rent, they were finding it very difficult to also save enough for a deposit and stamp duty.
- Despite their good salaries, the cost of houses seemed to rise quicker than what they could save.
Solution
As the property falls under the $950,000 threshold for Sydney, they qualify under the FHLDS (LMI waiver) scheme. Hence, they only needed 5% savings. Great Southern Bank does not insist on 6 months genuine savings like most other banks. So, we got them a personal loan of $50,000. This sat in an account for 3 months. This satisfied the condition of “genuine savings” (i.e. for many lenders money in an account for 3 months is enough). Since they were on good income, they could easily afford the personal loan and the mortgage loan. They get sub-80% LVR rates on the mortgage and do not have to pay an LMI premium, thus saving them approx. $24,000.
Most importantly, they could get out of the rent race and into their own home.
