Client Scenarios

Case 1: Meet Dave…

A successful new business owner looking to buy his first home.

  • Age: 31
  • Turnover: Annualises to $215,000
  • Occupation: Self-employed with a construction business. ABN registered over 24 months ago

Background

  • Having worked really hard to get his construction business up and running, Dave was in a position to buy his own place.
  • Although Dave’s been running a successful business and has a clean credit history, his bank had refused to help him with a home loan because although he’d registered his ABN 24 months earlier he’s only actually been operating for 6 months and he’s yet to finalise his tax returns with his accountant.

Solution

Luckily Dave came to Flatmart who knew about Low Doc Loans, which meant his dream of buying his own home could be a reality.

Since he had a clean credit history, an ABN registered for at least 24 months, registered GST for 12 months and could supply a declaration of financial position, Dave only needed to provide 2 forms of alternative income documentation;
– 6 months BAS
– 6 months BBS (inclusive of last month)
– Accountants Letter

Flatmart was able to assist Dave with a Low Doc home loan.

He was not only delighted to be offered a solution despite only being in operation a short time but was thrilled to find out that Low Doc product interest rate was on par with the rate from the traditional lender that had turned him down.

Case 2: Meet Adam…

He was looking to purchase his first home with non-genuine savings. 

  • Age: 35 years old 
  • Occupation: Self Employed Painter (GST not registered) 
  • Income: $65K 
  • Assets: Vehicle $5K; tools $10K; gifted funds of $60K 
  • Liabilities: Currently renting for $500pw; CC limit $5k

Background

Adam had been working as a self-employed painter for more than 3 years. 

He had no blemishes on his credit file and was taking home approximately $65k, which we were able to confirm on his tax returns and notice of assessments over the last 2 years. 

He had his tools for work, a vehicle and his only other debt apart from his existing rental commitment, was a credit card with a limit of $5k. 

Adam did not have genuine savings, however, a relative was planning on providing him a gift of $60k. Adam was looking to borrow $340k on a property valued at $400k. 

The Solution

Since Adam was able to supply the most recent 2 years of tax returns, 2 years of tax assessment notices and last 1 month’s business bank statements, Flatmart was able to find him a Home Loan which allows for non-genuine savings up to 90% LVR. Since his business turnover was <$75k, GST registration was not required. 

Case 3: Meet Sophie…

She has perfect pitch, superb timing and multiple income sources. 

  • Age: 34 
  • Occupation: Musician and part time school music teacher  
  • Income: $90,000 
  • Assets: $45,000 in savings, $10,000 car 
  • Liabilities: $15,000 in credit cards 
  • Credit file:  Unpaid default $890 > 24 months 

Background

Sophie is separated, lives with her mum and has two lively children. She would like to take the pressure off her mum and buy a home with a backyard and give her family some stability. 

Because of her family situation, Sophie’s salary is supplemented by additional income from government family payments and child support. An unpaid default has also narrowed her options as to which home loan lender can support her. 

The Solution

Luckily, Sophie came to Flatmart 

We run her scenario through lenders which they would consider all three sources of income and accept the past unpaid default. 

The Outcome

Sophie qualified for a low doc product which meant she could stop renting and buy her family their dream home. 

Case 4: Meet Andrew…

A self-employed carpenter with exceptional skills, huge passion and an outstanding ATO debt. 

  • Age: 38 
  • Turnover: $120,000 
  • Occupation: Carpenter 
  • Assets: $650,000 home 
  • Liabilities: $520,000 mortgage; $10,000 credit cards 

Background

Andrew had recently been hit with a large ATO debt that required immediate payment. 

He wanted to settle by releasing equity on his home but finding a lender willing to help proved difficult despite having a successful business and clean credit history.  

The last thing he wanted to do was sell his home to make this real life payment. 

The Solution

Luckily, Andrew came to Flatmart who knew all about alternative options outside of the traditional lenders. 

We contacted lenders who advised a low doc home loan might be the perfect real life solution as the lender could pay it out at settlement as part of the refinance. 

The Outcome

Andrew qualified a low doc product – he could pay out his ATO debt and keep his home. 

Case 5: Meet Trish…

She had been looking to consolidate $100K of business debts 

  • Age: 59 years old 
  • Income: PAYG $82K 
  • Super: $180K 
  • Assets: House valued at $850K 
  • Liabilities: Bank loan $130K 
  • Occupation: Lecturer for the last 8 years 

Background

Trish’s husband had passed away 1 year ago. Trish was a director and shareholder of his company but when her husband passed away the company ceased trading. 

The company had been placed into liquidation by a creditor and $100K in unsecured business debts were now being called upon which are secured against the family home. 

Trish was working full time in a PAYG role and wanted a mortgage to refinance the business debts that needed to be refinanced immediately. 

The Solution

Trish was able to qualify for the low doc product. 

In this case, it was necessary to obtain documentation (e.g. Deed of Company Arrangement) from the liquidator confirming that after payment of the $100K business debts, the company would have satisfied all of its financial obligations. 

The loan was subject to standard underwriting criteria including selecting a loan term that was appropriate for Trish’s retirement strategy.

Case 6: Meet Jimmy…

A business owner who was looking to access cash for business expansion. 

  • Age: 37 years old 
  • Assets: House valued at $814K 
  • Occupation: Company Director operating a transport business for the last 12 years 
  • Income: Last 2 years taxable income is $89K and $159K respectively 
  • Liabilities: Current home loan $370K and business loan $80K (secured against home) 
  • Credit impairment: Paid commercial default listed on CRAA for $64K registered just over 24 months ago 

Background

Jimmy needed $160K to purchase some new trucks to expand his business. 

Jimmy did not have his most recent financials completed yet but he had told Flatmart that his net profit had increased substantially to $280K due to securing a large new contract. 

The Solution

Jimmy was able to qualify for the low doc product. 

  • The chosen lender considers consolidation of business debts on Low Doc products. 
  • The chosen lender has unlimited cash out for acceptable purposes including renovation and business use. 
  • Jimmy was able to verify his income by providing a declaration of financial position plus one of the following:  
    • 6 months business bank statements (inclusive of the last 1 month), 
    • 6 month BAS,  
    • Accountant’s Letter. 

Case 7: Meet Matt and Megan…

Matt and Megan are married and have two children under the age of 8. Five years ago, Matt had a business that failed. Earlier this year he was discharged from bankruptcy. He has held down a steady permanent part time job at the local hardware store for the last three years. 

How did Flatmart help? With a low doc home loan, they were able to refinance their home to withdraw money to update their furniture. 

Background

Thanks to a recent inheritance, Matt and Megan were debt free and owned their own home; valued at $620,000. They wanted to use the equity in their home to withdraw $70,000 to update their furniture. 

With Matt’s income, a Centrelink parenting benefit, and the Family Tax Benefits Part A and B making up their income for serviceability; they were looking for a lender who could support their dream. 

The Solution

After having their requirements assessed by Flatmart, it became clear that a range of specialist lenders should be offered to Matt and Megan. After we presented them with a couple of options, Matt and Megan chose to apply for a low doc home loan. 

The Outcome

After reviewing Matt and Megan’s situation, Flatmart was able to find them a low doc home loan. This product allows for discharged bankruptcy (> 1 day accepted), and FTB Payments Part A & B. Parenting Allowances can be accepted at a rate of 100% as income for servicing. 

Case 8: Meet Jennifer…

A small business owner who was looking to increase her cash flow 

  • Age: 36 years old 
  • Super: $20K 
  • Occupation: Opened her own florist business 18 months ago 
  • Assets: Apartment $620K; Van $40K; Car $15K 
  • Income: 2018 taxable $25K and 2019 taxable $80k. Current profit level is $120K 
  • Liabilities: Mortgage $300K; Overdraft $40K; Credit Cards $40K; Lease Hire Purchase $38K 
  • Credit Impairment: 2 months current mortgage arrears and a telco default of $1,200 from 2019 

Background

Jennifer had used a business overdraft facility secured by her home to cover her business start-up costs. The business had grown fast and she was now leasing a delivery van and had acquired multiple credit cards. 

6 months ago, Jennifer’s mortgage had gone into arrears when her van was taken off the road after a motor accident resulting in a loss of income while she waited for the insurance claim to clear. 

Jennifer had been managing the minimum repayments on her debts but she had not been able to get back on top of her finances. 

A debt consolidation would reduce her monthly commitment allowing her to focus on continuing to grow the business. 

 The Solution 

Jennifer was able to qualify for a low doc home loan which can tolerate up to 1 month’s mortgage arrears. 

To verify her income, she was able to provide a declaration of financial position plus one of the following: 

  • 6 month’s BAS 
  • 6 month’s business bank statements (inclusive of last 1 month) 
  • Accountant’s Letter (not accepted on loan sizes > $1.5m) 

Case 9: Meet Steve…

He had an ABN registered for only 6 months 

  • Age: 26 years old 
  • Occupation: Truck Driver 
  • Income: Averaging $2,200 per week 
  • Assets: Savings $10K; Inheritance $55K; Truck $45K 
  • Liabilities: Truck Lease $25K 
  • Credit Impairment: None 

Background

Steve’s dad is a truck driver and had helped Steve set up his own business 12 months ago. Following in his dad’s footsteps, Steve had secured various contracts with different well known haulage companies. 

His ABN had been registered for just 6 months and he had also been GST registered for 6 months. 

Steve had told Flatmart that he banked his earnings into his business account and that he has also lodged quarterly BAS statements with help from his accountant. 

Steve has also recently come into an inheritance; he had already started saving for his own home but now with access to this inheritance he felt he had sufficient funds to purchase. He wanted to enter the property market as soon as possible. 

 The Solution 

Steve was able to qualify for the low doc product. 

After providing a declaration of his financial position and 1 month’s business bank statements, Steve was able to choose 1 of 3 other methods to verify his income. 

  • 6 months business bank statements (inclusive of last 1 month) 
  • 6 months BAS 
  • Accountants letter

Case 10: Meet Ben and Avril…

Ben and Avril are a couple focussing on wealth creation looking to buy their third investment property valued at $800,000 and are seeking to borrow 75% of the property price. The balance of funds will come from redraw on another loan, plus savings. Just over twelve months ago, Avril bought a 50% stake in a popular café franchise and now receives self-employed income from this business. The ABN for the business is less than two years and it is registered for GST. 

Ben has worked as a senior HR manager for an energy company for the last 4 years. Ben has a $1,500 unpaid default registered on his credit file from a credit card. This resulted from a dispute regarding a credit card charge whilst on his honeymoon three years ago, and the bank ended up lodging a default 27 months ago. Avril’s Equifax file is clear. 

They are looking for a lender who can assist them with mortgage financing for the investment property, as their bank has said they cannot help. 

The Solution

After reviewing their situation, Flatmart was able to assist the couple with a Low Doc loan which accepts Ben’s default since it was registered > 24 months ago. 

The other benefit of this low doc product is that it allows for a self-employed income source to be used to assess serviceability where the business has had an ABN registered for 6 to 24 months and has been registered for GST for at least 12 months. Avril’s business meets these requirements. 

Avril would be required to self-declare her income from the café business and verify this information in accordance with self-employed income verification requirements, as follows: 

  • 6 months business bank statements (inclusive of last 1 month) 
  • 6 months BAS 
  • Accountant’s Letter (not accepted on loan sizes > $1.5m) 

Whatever the circumstances, if an application does not meet traditional lending criteria, Flatmart can provide a second opinion. 

Flatmart likes to look at a wide range of factors when assessing a home loan application. They do not simply tick boxes as many other lenders do, instead Flatmart will get a more detailed and informed understanding before it starts making decisions.