Client Success Stories

Sale of business – Future income stream

Loan Amount: $1,800,000

Purpose: Assist with the purchase of an owner-occupied property following the sale of a business in 2023

Outcome: The applicant and partners sold their niche alcoholic drinks business to a major bottle shop entity in 2023, with the sale structured in 3 tranches over 5 years. The first payment was received in October 2023. Additionally, the business retained the applicant as a PAYG employee earning $150,000 annually. With this in mind, and leveraging the Business Sale Contract and an accountant’s letter, we considered both PAYG income and future tranches in our servicing calculations. As a result, this enabled the applicant to purchase a home without having to wait for the final tranche payment to be made.

Single applicant – PAYG tradesperson

Loan Amount: $552,000

Purpose: Debt consolidation of 8 loans

Outcome: After separating from his partner, the applicant faced a heavy debt burden. Initially, he worked hard to service all debts over 2 years, but as a consequence of rising interest rates, he fell behind on payments. However, recognising the challenges, he took steps to rectify his financial situation. As a result, with a full understanding of the customer’s situation and acknowledging his good intent, we consolidated all debts, improving both his cash flow and financial position. In fact, his monthly repayments were reduced by $1,290, allowing him to manage his finances better and enhance his personal lifestyle.

Individual

Loan Amount: $508,000

Purpose: Debt consolidation of 7 loans

Outcome: A mortgage broker reached out to VMG about a client with seven separate loans.  Despite experiencing arrears within the past six months, all loans were currently up to date.  Notably, 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.  In response, the mortgage broker promptly supplied VMG with the necessary financial details to assess the loan. On the same day, we issued an Indicative Approval, reducing the client’s monthly commitment by $525.  This demonstrates our pragmatic lending approach, which focuses on real financial circumstances rather than rigid risk scoring, ultimately leading to an improved financial position for the applicant.

Married Couple (61 and 59)

Loan Amount: $1,600,000

Purpose: Refinance investment property, refinance land loan, and construct a retirement home

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) for their current house.

The wife was on Workcover as she had damaged her shoulder – there was no return to work date.  Due to her injury, she received 75% of her annual salary, amounting to $63,750.  The investment property they owned in Metro Melbourne was being rented to their daughter at $400 per week when the market rental was $650 per week (evidenced by a rental appraisal letter).  Meanwhile, the husband had a super policy worth $1,500,000 which could be accessed at age 65. Due to these factors, we couldn’t demonstrate servicing based on both income and rent received. Nevertheless, we applied a commonsense approach, allowing the full $85,000 salary for the wife and permitting market rental of $650 per week at 90% (rather than the usual shading to 80%).

Married Couple (62 and 63)

Loan Amount: $375,000

Purpose: Complete construction of owner-occupied home

Outcome: The customers funded the construction to the “lock up” stage via cash resources.  The builder incorrectly advised them to start the construction 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 confirmed its ongoing nature (evidence provided), we were able to make the loan service.  Other mitigating factors were the same builder so continuity of construction continued, low LVR (loan to value ratio) on completion (less than 30%), and pensions were about to increase as cash at the 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.

A family trust with a trading company

Loan Amount: $605,000

Purpose: Purchase of a business

Outcome: The applicants had the opportunity to purchase a wholesaling business from vendors wanting to retire. They purchased this business to complement their existing trading businesses. The applicants’ other businesses carried debt, and they met these loan commitments from regular 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 that 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.