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.
Based on the facts above, the broker suggested Pepper Money to Ben & Avril.
After reviewing their situation, Pepper Money was able to assist the couple with a Specialist Alt Doc 75% LVR loan which accepts Ben’s default since it was registered > 24 months ago. At a 75% LVR, the requested loan amount falls within Pepper Money’s policy (which would allow for a maximum loan size of $1.75M at 75% LVR).
The other benefit of this Specialist 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 12 to 24 months, and has been registered for GST for at least 6 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 Pepper Money’s self-employed income verification requirements, as follows:
The Self-Employed income verification requirements are a declaration of financial position in the Pepper format plus one of the following:
- 6 months business bank statements
- 6 months BAS
- Accountant’s Letter in Pepper format. Accountant must have acted for client > 12 months.
Whatever the circumstances, if an application doesn’t meet traditional lending criteria, Pepper Money can provide a second opinion.
Pepper Money 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 Pepper Money will get a more detailed and informed understanding before it starts making decisions.
Do you have a client with a similar scenario?
At Pepper Money we have a dedicated and highly experienced scenarios team who will review your scenario and respond in the same day.*
*for scenarios received by 4:30pm AEST
These case studies are based on real-life examples and have been provided solely for educational purposes. The case studies are not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser. Outcomes will vary depending on the applicant’s individual circumstances. Upfront fee savings specified in this example are based on the Pepper Advantage Alt Doc 75% product. Savings may vary depending on the loan product. All applications are subject to Pepper Money's normal credit assessment and loan suitability criteria. Terms, conditions, fees and charges apply. Pepper Group Limited, Australian Credit Licence Number 286655, is the servicer of loans made by Pepper Finance Corporation Ltd ACN 094 317 647.