Credit-Impaired Home Loan Unconditionally Approved in Just 7 Days – 90% LVR with No Risk Fee!
A challenging investment property, adverse credit history, 90% lending and a resort-style apartment complex. How did Best Foot Forward Mortgage Solutions secure unconditional approval in just seven days?
Research, research, research!
At Best Foot Forward Mortgage Solutions, Principal Mortgage Broker Shona Stephenson loves a challenging home loan application, especially when her research, lender policy knowledge and understanding of our clients' circumstances can make a significant difference to the outcome.
Our latest success story involved a couple purchasing an investment apartment on Queensland's Sunshine Coast.
On paper, this was far from a straightforward mortgage application.
The property was located within a complex offering resort-style facilities, one applicant had experienced previous financial hardship, and the clients required 90% loan-to-value ratio (LVR) lending without an additional risk fee.
Several lenders weren't prepared to consider the security.
But rather than accepting NO as the answer, we researched the property, investigated lender policies and carefully documented our clients' financial circumstances.
The result? Unconditional home loan approval in just seven days, with a 30-day settlement timeframe!
Challenge 1: A Resort-Style Apartment That Some Lenders Wouldn't Finance
Our clients had found an investment apartment in a complex offering resort-style facilities.
Sounds appealing, doesn't it?
Unfortunately, not every lender sees it that way.
Some Australian lenders have restrictions around properties classified as serviced apartments, holiday accommodation or resort-style developments.
In this particular case, the word resort associated with the building was enough for some lenders to decline consideration of the property.
But we knew there was more to the story.
Understanding the Difference Between a Resort and an Individually Owned Apartment
We investigated the property's ownership and management arrangements.
Importantly, we established that:
Each apartment was individually owned.
Owners retained control over the management of their own property.
The apartments were not automatically subject to compulsory resort management arrangements.
The property's resort-style facilities did not necessarily mean it should be treated as traditional resort accommodation for lending purposes.
By understanding the property's actual characteristics, rather than relying solely on its name or appearance, we were able to identify lenders whose security policies could accommodate the apartment.
The lesson? Just because one lender says NO to a property doesn't mean every lender will.
Challenge 2: Previous Financial Hardship and an Impaired Credit History
The second challenge involved one applicant's credit history.
Our client had previously worked in the building industry and experienced financial difficulties involving outstanding creditors.
These circumstances ultimately resulted in a period of financial hardship and negatively affected his credit history.
However, there was an important part of his financial story that needed to be explained.
Our client had taken responsibility for his financial obligations.
He had sold a previous property to repay outstanding debts to his lender and address his financial commitments.
Unfortunately, even after someone has taken steps to resolve previous financial difficulties, their credit report may continue to reflect that history.
A Credit Score Doesn't Always Tell the Whole Story
Rather than simply submitting the credit report and hoping for the best, we took the time to understand what had happened.
We explained the applicant's previous circumstances, the reasons for the financial hardship and the steps he had taken to repay his outstanding debts.
We also demonstrated his current financial position and ability to meet the proposed lending commitments.
This allowed us to present a more complete picture of the applicant's circumstances.
Credit impairment doesn't automatically mean home ownership or property investment is out of reach.
Every lender has different credit policies, and some are more willing than others to consider applicants with historical financial difficulties, particularly where there is a reasonable explanation and evidence of improved circumstances.
Our job was to identify the right lender and present the application accurately.
Challenge 3: Securing 90% LVR Without an Additional Risk Fee
Our clients required finance at 90% of the property's purchase price.
At this lending level, borrowers can encounter additional costs, including lenders mortgage insurance (LMI) or lender risk fees, depending on the lender and product.
Combining a high LVR with an impaired credit history and a resort-style property made lender selection particularly important.
We needed a lender willing to consider all three elements:
The property's resort-style characteristics and individual ownership arrangements.
The applicant's historical credit impairment and financial hardship explanation.
The requirement for 90% LVR lending without an additional risk fee.
After extensive research and lender discussions, we identified a lending solution that met our clients' requirements.
The result was 90% LVR lending without an additional lender risk fee.
This was a significant achievement given the complexity of the application.
Challenge 4: Helping Our Clients Purchase $100,000 Below the Asking Price
Our involvement didn't begin when the loan application was submitted.
We had already been working closely with our clients to help them understand the property market, their borrowing capacity and the potential lending implications of the apartment they were considering.
We shared property market research, comparable sales information and valuation insights to help them make an informed decision about their offer.
Rather than simply accepting the vendor's asking price, our clients submitted an offer informed by that research.
Their offer was accepted at $100,000 below the original asking price!
And there was more good news.
The Bank Valuation Supported the Purchase Price
When the lender completed its valuation, the property was valued at the agreed contract purchase price.
This was an important step in securing the finance.
At 90% LVR, a valuation below the purchase price could have required our clients to contribute additional funds or reconsider their lending arrangements.
Instead, the valuation supported the transaction, allowing the application to progress without that additional complication.
This is why we believe mortgage broking should involve more than simply comparing interest rates.
Understanding property valuations and lender security requirements before a client commits to a purchase can make a substantial difference.
The Result: One-Touch Approval and Unconditional Finance in Seven Days!
After all the preparation, research and lender discussions, we submitted the application.
And the result?
ONE-TOUCH APPROVAL!
The application was assessed and approved without the need for repeated rounds of additional information requests.
From formal loan application to unconditional approval, the process took just seven days.
<escape>###</escape> Our Clients' Results
AchievementOutcomeHome loan approvalUnconditionalApproval turnaround7 daysLoan-to-value ratio90%Additional lender risk feeNoneCredit historyHistorical impairment acceptedProperty typeResort-style investment apartmentValuationSupported contract purchase priceNegotiated purchase$100,000 below asking priceSettlement timeframe30 daysAssessmentOne-touch approval
For a transaction involving a complex security, historical credit impairment and high-LVR lending, this was an excellent outcome.
Thinking Beyond Settlement: Creating Future Refinancing Opportunities
One of the most important aspects of this lending solution is that it doesn't necessarily need to be our clients' long-term mortgage.
We have secured finance that allows them to purchase their investment property now, while potentially positioning them to refinance in the future.
As their financial circumstances continue to improve, their credit history matures and their loan-to-value ratio potentially reduces, additional lending options may become available.
That could include:
Access to a broader range of lenders.
More competitive interest rates.
Different loan structures and repayment features.
Potential refinancing opportunities as their financial position strengthens.
Of course, future refinancing will depend on lender policy, property valuation, borrowing capacity and credit history at the time.
Our goal is not simply to get a home loan approved today. It's to help our clients make informed lending decisions for the future.
And our service doesn't stop at settlement.
At Best Foot Forward Mortgage Solutions, we continue reviewing our clients' lending arrangements and monitoring opportunities where refinancing or restructuring may be beneficial.
Why Research and Lender Policy Knowledge Matter
This application is a perfect example of why choosing the right mortgage broker can make such a difference.
Imagine if our clients had approached a lender that immediately declined the apartment because of its resort-style facilities.
Or a lender that automatically declined their application based on historical credit impairment.
They may have assumed purchasing the property simply wasn't possible.
But we knew that not every lender assesses properties, credit histories or high-LVR applications in the same way.
We didn't change our clients' circumstances. We found a lender whose policies could accommodate them.
That required researching the property, understanding the credit history, identifying suitable lender policies and preparing a comprehensive application before submission.
And that preparation contributed to an exceptionally fast approval.
Have You Been Declined for a Home Loan?
If you've experienced previous financial hardship, have an impaired credit history or are purchasing a property that doesn't fit traditional lender criteria, it may be worth seeking a second opinion.
At Best Foot Forward Mortgage Solutions, we assist with a wide range of complex lending scenarios, including:
Credit-impaired and adverse-credit home loans.
Previous financial hardship arrangements.
High-LVR lending.
Investment property finance.
Resort-style and non-standard residential properties.
Self-employed and complex income applications.
Refinancing and loan restructuring.
We take the time to understand your circumstances, research the available options and identify lenders whose policies may suit your needs.
Because sometimes a challenging home loan application just needs the right research, the right lender and the right mortgage broker.
Let's Find a Solution
Whether you're buying your first home, investing in property or rebuilding your financial position following a difficult period, we'd love to help you explore your options.
Contact Shona Stephenson, Principal Mortgage Broker, Best Foot Forward Mortgage Solutions for a complimentary discovery call to discuss your circumstances and learn what may be possible.
Best Foot Forward Mortgage Solutions
We work for you, not the banks!
Disclaimer: This case study reflects the circumstances and lending outcome of a particular application. Individual results will vary. All finance applications are subject to lender credit policies, satisfactory verification, property valuation and approval requirements. Historical credit impairment, financial hardship and high-LVR lending are assessed on a case-by-case basis. Approval timeframes and fee arrangements are not guaranteed. A risk-fee-free loan may still involve other fees or costs.
