Case Study 3

From Construction Hardship to a Fresh Start

Broker: Michael Fairclough

Our client Victoria built her home through a local builder who promised a quick construction turnaround, and delivered anything but. And due to her being a first homebuyer, the finance was originally arranged through Bankwest on a low-deposit, higher-interest loan product.

The build was far from smooth sailing – it stretched out over three difficult years, and during that time her higher interest rate couldn’t be reduced until construction was finished. Understandably, this put her under financial strain and led to periods of hardship.

When the build was finally complete, there was one last hurdle: she needed to make a final payment to the builder before receiving her keys – funds she simply didn’t have available. That’s where her mortgage broker Michael stepped in.

He was able to refinance her loan to Bluestone, a specialist non-conforming lender that works with complex lending situations such as Victoria’s. This refinance not only consolidated the personal debts she had accrued during the delayed construction of her home, but also provided the extra cash she needed to secure her keys. Although Bluestone’s interest rate was higher than mainstream lenders, it gave her the lifeline she needed to move into her home and start fresh.

The next step was building a track record. By making six months of on-time repayments with Bluestone, she became eligible to move her loan again – this time to a mainstream lender with a much lower interest rate. We successfully refinanced her to Westpac, cutting her monthly repayments significantly and easing her financial pressure.

Taking into account Victoria’s preferences, overall Michael helped his client to:

• Consolidate all of her accrued debts into her Bluestone refinance, as well as get some cash out to pay the builder for the final variation to allow her to get her keys.
• Even with increasing the loan amount with the consolidation and cash out, her repayments were still $200 less per month.
• With the final refinance to Westpac, he consolidated a new personal loan debt (which she had taken out for solar and landscaping), got an additional $70k out to finish some additional home improvements, and still reduced her repayments by a further $556 per month.
• The new 30-year loan term reduced her outgoings, so she had just one repayment, allowing her to focus on paying this down quicker so she can be mortgage free well before the 30 years left on her mortgage.

After years of struggle, our client could finally look ahead with confidence. Not only is she now settled in her own home with an affordable loan, but she was also able to take her first holiday in many years – a well-earned trip to Sydney to see her family.

Another great example of how we help our clients move from stress to success!