Kimberley and her partner Todd were looking at buying a home together. They had each contacted their respective banks but were finding it difficult to get hold of anyone who could give them a helpful answer. Smartline broker Martin Castilla was an old client of Kimberley’s, so the couple decided to give him a call.
“We’d been pooling our savings by renting together for a few months before we saw Martin, and we were keen to find out what a realistic savings goal would be to purchase a property,” says Kimberley. “Todd had already paid off a mortgage on a block of land, but we were exploring our options for buying closer to work, shops and public transport.”
Martin was able to help the couple understand how to use the equity in Todd’s block of land toward the new purchase. He also explained how the various lenders would calculate their borrowing capacity.
“While we both had permanent jobs as well as some savings, Martin made us realise we didn’t actually need the enormous deposit we thought we’d need,” says Kimberley. “We had thought we could only afford an older property in one of the wider fringe suburbs, but after speaking with Martin realised we could actually afford to build a new home, which was very exciting!”
Martin began looking for a simple P and I loan for the land and a construction loan for the new build, with the lender who could offer the best deal.
As often happens, there were a couple of hurdles. The first came with needing a tight turnaround for the loan approval on the land, because there was a cash back clause on the land if they managed to settle before the end of the financial year.
“It was a bit of a race against the clock to get the loan organised and settled, and we needed to make some updates to Todd’s existing block before we could use it as security,” Kimberley says. “Martin put us on to a great conveyancer who was really helpful and flexible. Martin himself was very responsive in giving us updates on our application and basically holding our hand each step of the way.”
The next challenge was Kimberley’s surprise redundancy just before construction commenced. “We were ready to sign off on all of the final builder’s documents, when my employer made the sudden decision to restructure. I was completely devastated … and felt like our building plans were over.”
Kimberley and Todd had already begun paying off the mortgage on the land, and had paid the deposit on the build. But suddenly the mortgage approval for the construction loan had to be based on Todd’s income alone, with Kimberley as a ‘dependant’. “Even though I got a new job very quickly, lenders were discounting my income completely, which was very frustrating, because we certainly could have handled our repayments.”
“We spent several months calling Martin to ask all sorts of ‘really dumb’ questions, but he was so patient. He also negotiated with the lender on our behalf. Even though my new job was only casual, he arranged to have my income count towards our borrowing capacity. Luckily the lender took our individual situation into consideration instead of the generic check box approach.”
It was a tough and uncertain time for the couple but Martin’s knowledge, connections, support and willingness to help got them over the line. “It’s easy to forget that things take time,” says Kimberley. “If I had a dollar for every time Martin said “hang in there” I could probably pay off a significant portion the mortgage!”
“Martin was always so quick to respond via text, email or phone and continued to check up on how we were doing throughout the entire process. He helped us understand how mortgages, security property and construction loans actually work so we could make the right decisions and feel comfortable about what we were doing. We’re really looking forward to owning our home and the distant promise of a rent-free future!”