Scenarios

Customer: Sale of Business – Future income stream
Loan Amount: $1,800,000
Assist with purchase of an owner-occupied property following sale of business in 2023)
Outcome: Applicant and business partners created a niche alcoholic drinks business, selling it to a major bottle shop entity in 2023.  Sale is by way of 3 tranches over a 5-year period, the first payment having been received at the end of October 2023.  Applicant has been retained by the business as a PAYG employee earning $150,000 per annum.  With comfort on hand by way of Business Sale Contract and Accountant letter confirming the details of the transaction, we have been able to consider both PAYG income ($150,000 per annum) and future income by way of remaining tranches in our servicing calculations, enabling the applicant to purchase their owner-occupied home without having to wait for the final tranche payment to be made.

Customer: Single Applicant – PAYG Trades Person

Loan Amount: $552,000

Debt consolidation of 8 loans

Outcome: Applicant had been left with full debt burden after separating from his partner.  Over a 2-year period, he had worked hard to service all debts, successfully doing so initially, then falling into a period of late/missed payments.  He rectified the financial situation but, as interest rates continued to rise, identified the warning signs of again finding it difficult to service all debts, with recent servicing history being patchy at best.  With a full understanding of the customer’s situation and acknowledging his good intent and efforts to both manage and better his financial position, we were able to consolidate all debts and improve both his cash flow and personal lifestyle.  Total monthly repayments were $1,290 per month less that what he had been paying demonstrating we were putting him in a better financial position.

Customer: Individual

Loan Amount: $508,000

Debt consolidation of 7 loans

Outcome: A broker contacted VMG, informing us of a client with seven separate loans.  Despite experiencing arrears within the past six months, all loans were currently up to date.  The client’s credit score was 25, and four non-conforming lenders declined the request due to (a) a low credit score, (b) excessive debts for consolidation, and (c) unmet servicing requirements.  The broker promptly supplied VMG with the necessary financial information to assess the loan required, and on the same day, an Indicative Approval was issued, reducing the client’s monthly commitment by $525.  A demonstration of our pragmatic lending approach, devoid of risk scoring, leading to an improved financial position for the applicant.

Customer: Husband and wife (61 and 59)
Loan Amount: $1,600,000
Refinance of investment property, refinance of land loan and construction of retirement home (on the land being refinanced)
Outcome: Both husband & wife had been transferred in their employment to Canberra where they had PAYG employment with separate government departments.  He was a lawyer on $215,000 per annum and she was a midwife on $85,000 per annum.  They paid rent (significantly subsidised by the ACT Government) on the house they were living in.  Wife was on Workcover as she had damaged her shoulder – there was no return to work date.  Due to her injury, she was being paid 75% of her annual salary, being $63,750.  The investment property they owned in Metro Melbourne was being rented to their daughter at $400 per week, when market rental was $650 per week (evidenced by a rental appraisal letter).  The husband had a super policy worth $1,500,000 that was able to be accessed at age 65.  Servicing was unable to be demonstrated on both incomes and rent received.  To make this deal work, our commonsense approach was to allow the full $85,000 salary for the wife and to allow market rental of $650 per week at 90% (not the usual shading to 80%).

Customer: Husband & wife (62 and 63)

Loan Amount: $375,000

Complete construction of their owner-occupied property.

Outcome: Customers had funded the construction to “lock up” stage via cash resources.  They had been incorrectly advised by their builder to make a start before securing finance not realising that a partially completed home would be difficult to raise a new loan.

Allowable income was the biggest challenge with this opportunity.  At first glance, servicing was unable to be demonstrated at 0.82 times.  As the husband had had a stroke in 2014 and was paralysed, we needed to get an understanding of his disablement payments, what was taxable and what was non-taxable, the wife’s carers payments as she was his primary carer and two forms of Centrelink pensions. Once we understood all income and were comfortable with its ongoing nature (evidence provided), we were able to make the loan service.  Other mitigating factors were same builder so continuity of construction continued, low LVR on completion (less than 30%), pensions were about to increase as cash at bank had reduced due to funds being spent on the construction to date and there was circa $430,000 in super that could be used to extinguish the debt in the future.

Customer: Family trust with a trading company

Loan Amount: $605,000

Purchase of a business

Outcome: Applicants were given an opportunity to purchase a wholesaling business from vendors wanting to retire. This business purchase was to complement other trading businesses the applicants owned. These other businesses all had debt attached to them and these loan commitments were being met from usual business operations. They experienced challenges with other lenders to consider their borrowing request due to their complex group financials and business and personal commitments. VMG assessed the new borrowing amount solely from the vendor’s financial statements in isolation from the other entities within the Group. We were also able to add-back $100,000 worth of dividends paid that were originally for the vendors’ wages. We were comfortable the existing business and personal debt were being serviced from those entities so did not need to take into consideration from a servicing point of view on the new loan of $605,000.