THE STORY
What the broker brought, how the credit analyst read it, and what settled
01 · The challenge
A husband of 62 and wife of 63 needed funding to complete construction of their owner occupied home. They had paid for the build to lock-up stage from their own cash resources, having been advised by their builder to start before finance was arranged. A partially completed property is harder to finance than either a vacant block or a finished home, and their allowable income initially serviced at only 0.82 times. The income itself was unusual on every line: the husband had been left paralysed by a stroke in 2014 and received disablement payments, the wife received carer payments as his primary carer, and both received Centrelink pensions.
02 · How VMG assessed it
Human underwriting started by understanding what each payment actually was. The disablement payments were reviewed to establish which portions were taxable and which were not, and the carer payments and both pensions were assessed on the same basis. Evidence was obtained confirming that each payment was ongoing rather than temporary, which is the point that determines whether income of this kind can be used. The security position supported the file, with an LVR on completion of under 30 per cent. Credit also took into account that the couple’s pension entitlements were due to increase as their cash reserves had been drawn down by construction costs, and that approximately $430,000 in superannuation was available to extinguish the debt in future. Because the same builder who had completed the work to date was continuing, there was no break in the project.
03 · The outcome
VMG settled a $375,000 construction completion loan and the couple finished their home. A file that had been declined into a corner by its own progress was resolved by reading the income properly and recognising the strength of the security position.
THE TURNAROUND
The same file, before the refinance and at settlement.
BEFORE VMG
AFTER SETTLEMENT
💡THE VMG COMMON-SENSE ADVANTAGE
HOW IT WAS ASSESSED
Every file is read by a credit analyst, not scored by a system. There is no credit scoring, and no DTI or DSR ratio applied. The product and the terms depend on the individual file, so talk to your BDM about where a similar scenario fits.
Test the scenario with VMG credit before you lodge. VMG lends only through accredited mortgage brokers.
Related
QUESTIONS
All applications are subject to Victorian Mortgage Group’s standard credit assessment and lending criteria. Terms, conditions, costs and charges apply. This article is general information only and does not take into account your objectives, financial situation or needs.
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