Being self-employed can often create additional complexity when applying for a home or construction loan. Especially if you don’t have more than two full years of trading history reflected in your tax returns and financial statements.
Venro recently worked with a couple who are both self-employed to help them build their dream home. They already owned the vacant land through bank funding and at the same time needed support to refinance an investment property, to use the available equity to contribute to the build of their new home.
Fortunately, our clients approached us very early in the process as they were aware that the complexities of their construction project and employment status would need extra help on the finance front. Having worked with Rohan in the past they knew the best place to start the process!
Rohan turns a complicated process into a breeze. I’ve financed several properties with Rohan and will do so again in the future. I’ve referred several family, friends and colleagues to Rohan and would have no hesitation in continuing to recommend him.
Mel Pikos
Starting early gave Rohan plenty of time to workshop the deal with numerous private banking departments across the scope of Big four to small regionals banks, that Venro have existing relationships with.
Rohan was able to work with private bankers to get a strong idea of which bank had the greatest appetite to approve the application based on the clients preferred terms. Something that would be a great deal more difficult to do without the help of a finance expert with strong relationships with lenders.
One of the clients had recently left PAYG employment to start his own venture and did not yet have two full years of self-employed trading. Adding to the complexity of the financing was that he also has an interest in a syndicated property investment with associated commercial debt. Many of the banks we approached on his behalf wished to treat both the income produced from this investment and debt shared with other investors with unfavourable terms, so we also needed to address this in the process.
Our clients had a strong relationship with their builder and because of that trust had a preference towards funding of their construction project on a cost plus contract. This posed additional challenges, as very few banks with appetite to fund construction will do so on a cost plus basis due to risks of escalating prices – most prefer fixed price building arrangements.
Their existing bank had done an excellent job assisting with a solution for the land acquisition, but they were unable to assist with the construction on a cost plus basis or get comfortable with our client’s complex income streams and the documentation available to support the application.
Working closely with the client and the banks, Venro helped them achieve:
- Unconditional approval at the clients’ preferred bank for the construction of their dream home on a cost plus building contract with their preferred builder.
- Unconditional approval for refinance of their investment property, along with cash out to contribute to the construction.
- No cross-collateralisation of security which is often requested by lenders.
A fantastic result given the complexities for a happy return client.