When Ivan Marsic and his wife Tanja Brinkman decided they wanted to knock down their house and build a duplex, they didn’t expect to have any problems securing a loan to build the new property. The house had been fully paid off, and Ivan had been with the same bank since primary school. They also planned to rent out or sell the second dwelling once built.
“I went to my local branch and spoke with the lender there,” says Ivan. “They put limited information into the computer and effectively, the computer said ‘no’. I was a bit deflated after that, and didn’t quite understand it as I didn’t feel there was much of a risk to the bank at all. I’d been loyal to the bank for a long time, and thought ‘surely you can spend a bit more time getting to know me and what I’m doing’. When they suggested I try another bank, I thought it was the oddest thing I’d ever heard!”
Friends recommended contacting Smartline mortgage broker Stuart Morrow.
“Stuart had a lot of knowledge about the different options; he introduced us to the mortgage world because it was pretty new to us. He knew which banks were good at building loans and had the flexibility we would need.”
Stuart recommended Ivan and Tanja take out two loans – a home loan for the dwelling they would live in and an investment loan for the other dwelling. This separation would make it easier to calculate tax deductions – for things such as interest, legal expenses, repairs etc – which would apply to the investment property only.
Separating the loans also allowed the couple to focus on paying off the home loan on their owner-occupied property, where interest wasn’t tax deductible. Stuart suggested directing all their income into an Offset account, thus minimising the interest paid on this loan. They didn’t put any income into the investment loan since the interest was tax deductible. In this way, the couple were able to own their own home faster.
It was anticipated that the initial period of the loan would be the most difficult financially, due to their extra expenses such as renting elsewhere and design fees, so Stuart made sure the couple could pay interest only for the first few years to aid their cash flow.
“In the end, it all went as we had hoped,” says Ivan. “Stuart explained everything and was able to articulate things in layman’s terms. He was happy to answer all our questions so that we could understand the complexities of what we were doing. He was very transparent and honest, which made us feel at ease.
“Stuart also helped us refinance recently, by getting in touch with a great offer that had become available for investment loans – this has saved us thousands.
“It really is a fantastic service – I don’t have to knock on doors and negotiate with the banks, I can just deal with someone like Stuart!’”