The couple’s aspiration for a holiday home on the South Coast was hindered by the lending limitations set by their past financials. Despite a flourishing business and solid income, traditional loan assessments based on their previous two-year financials did not showcase their true borrowing capacity, putting their dream just out of reach.

The Challenge

Our clients, a self-employed couple, were on a mission to purchase their dream holiday home on the South Coast. They encountered obstacles due to limited borrowing power, as their financials from the past two years didn’t sufficiently support the loan amount they needed. Despite their business taking a positive turn and drawing a substantial wage, their historical financial records fell short of reflecting their current financial prosperity.

The Solution

We introduced them to alternative methods of income verification tailored for self-employed individuals, such as reviewing BAS statements, obtaining Accountant’s Letters, and exploring the new Simple Verification for Self-Employed. The Simple Verification method, which involved analyzing six months of payslips, proved to be the golden ticket. By annualizing their six months of income over a year, we significantly enhanced their borrowing capacity. This financial maneuvering enabled us to tap into the equity of their existing home, paving the way for them to acquire their much-anticipated holiday retreat on the South Coast. The dream was no longer a distant vision; it was a reality, enriched with the promise of countless cherished moments in their new sanctuary.

The Outcome

With their borrowing power successfully amplified and the right loan strategy in place, the clients not only secured their idyllic holiday home but also unlocked a new level of financial flexibility. The seamless navigation through alternative income verification methods ensured that their current financial stability was accurately represented, leading to a fulfilling transaction. As they settle into their coastal haven, they do so with the knowledge that their entrepreneurial journey and financial acumen played a pivotal role in turning their dream into a tangible reality.

A seasoned investor hit a snag when attempting to add a fourth property to her collection; her broker said she’d maxed out her borrowing capacity. Despite this, her portfolio was healthy, with a strong 60% LVR. We switched her loans to Interest Only to improve cash flow and connected her with a non-bank lender that recognized her rental income potential, enhancing her borrowing power. Our strategy led to a profitable interstate property purchase and plans for further expansion into her SMSF, underlining her investment acumen.

The Challenge

An ambitious property investor was aiming to add a fourth property to her impressive portfolio. However, she hit a roadblock when her current mortgage broker told her that her borrowing capacity was fully utilized. Upon reviewing her property portfolio, it became apparent that equity was abundant, with a solid 60% Loan to Value Ratio (LVR) in her holdings.

The Solution

After a thorough analysis of her financial situation, we shifted all her loan repayments to Interest Only, significantly enhancing her cash flow. To facilitate her property acquisition, we introduced her to a non-bank lender, known for their flexibility and favorable terms for property investors. This lender acknowledged the full potential of her rental incomes, applied only a minimal loading on her existing Interest Only repayments, and worked with a lower benchmark for living expenses, thereby boosting her borrowing capacity.

The Outcome

The strategic financial restructuring and lender switch facilitated an interstate property acquisition worth $563,000, boasting a robust 7% rental yield. This fifth addition to her portfolio not only solidified her status as a savvy investor but also fueled her confidence and provided clear guidance for future endeavors. Within the next 12 months, she plans to acquire two more properties, and we’ve laid out a strategic plan for her to delve into investment through her Self Managed Super Fund (SMSF), opening doors to even more opportunities and financial growth.

Our client surpassed their pre-approval limit at auction, risking their property purchase due to insufficient funds. We refinanced their existing property, extending the loan term and securing a lower interest rate, which increased their borrowing capacity. This bridged the financial gap, allowing them to finalize their new property acquisition successfully. The client’s proactive refinancing approach ensured their property ownership and financial health.

The Challenge

The client secured a pre-approval for their maximum borrowing capacity but ended up bidding beyond this limit at an auction. This left them short of funds to cover the difference between the pre-approved amount and the final purchase price.

The Solution

Before bidding for a new property, they had an existing property which has 25 years remaining on the loan term. We opted to refinance this property and by resetting the loan term to 30 years and negotiating a lower interest rate, we effectively increased their borrowing capacity. This strategic move provided them with the necessary funds to bridge the gap and complete their property purchase.

The Outcome

The client transitioned from a potential financial setback to a triumphant property owner, all thanks to a tailored refinancing strategy. With a more manageable loan and an extended term, they could secure their new property without compromising their financial stability. This experience not only resolved their immediate funding shortfall but also imparted valuable lessons in strategic financial planning and the importance of having a flexible and responsive mortgage strategy.

Faced with a low property valuation from their bank, our client was unable to access equity for renovations. We stepped in as mortgage brokers, securing multiple no-cost valuations. The result was a higher valuation from one bank, enabling the client to refinance for a better rate and withdraw $150,000 for home improvements. Consequently, the renovations enhanced both their living space and property value, leaving the client thoroughly satisfied.

The Challenge

We had a client looking to access equity from their owner-occupied property to help fund cosmetic renovations on their property. The client originally approached their existing bank and had a valuation completed. The valuation was completed but did not allow for any further lending.

The Solution

We spoke with the client and explained that as mortgage brokers, we can order valuations with multiple banks. We approached three different banks and ordered three valuations at no cost to the client. One bank valuation came back with a much higher result that allowed the client to refinance their existing home loan to a better interest rate and access $150,000 to go towards their kitchen, bathroom and landscaping upgrades.

The Outcome

Empowered with the ability to upgrade their living space, the client successfully utilised the additional funds to design their property to their style of livability and functionality. Their investment in key home improvements not only increased their quality of life but also added substantial value to their property. With a more competitive interest rate and a home tailored to their tastes and needs, needless to say, the client was delighted with the outcome.

When it comes to buying your first home, you have two options:

  1. Purchase your own home: buy your first property and you have a mortgage
  2. Purchase as a ‘rentvestor’: you continue to rent where you are and purchase an investment property in an affordable area.

The term ‘rentvestor’ was coined and trademarked by LJ Hooker as one of the key trends for millennials (i.e. under 30’s) for the buyer who loves their lifestyle of renting close work or the city and doesn’t want to relocate – but knows the importance of getting into the property market. Given they are priced out of their local area or the suburb they want to live in, an entry point into the investment property market is to buy within their budget.

This particular client was aged 25 and was renting near Cronulla and knew he needed to get into the market, but was priced out of this area.

The Situation

  • Wanted to buy in the area by his 30th birthday.
  • Moderate income of $55,000
  • Paying rent of $250 per week
  • Savings of $30,000

The Solution

  • We put his budget under a microscope and looked at ways he could add a bit more to his savings
  • We then worked out a strategy for him to invest using an investment property Buyers Agent. This focused on two key goals:
  1. Cash flow: how does he purchase a property which is neutrally or positively geared?
  2. Capital growth: by trusting a Buyers Agent to identify an area which was going to increase over the next five-year period, he would ensure he would have equity to draw out for his own purchase.

The Outcome

  • Apart from becoming a confident property investor, he has now also educated his friends on how they can get their foot in the door and not be intimidated about buying investment properties.
  • Within two months, he had gone from simply ‘renting without a plan’ to having his first investment property under his belt
  • He contributes regularly to his offset account, which is building his deposit for his first home purchase when he turns 30
  • His budget provides ‘play money’, which is his allocation for holidays, personal expenses, and weekend socialising
  • He has a strategy in place that will enable him to keep purchasing an investment property each year until he turns thirty, using the equity he has in his existing investment property/ies.

Why Isn’t Everyone Doing This?

  1. It takes commitment to achieve returns over the longer term. Some people want short-term gains rather than long-term rewards
  2. You need to have a strategy: simply saying “I want to buy an investment property” is not a strategy – that’s a goal. How long do you want to hold this for? When you will expect to sell this?
  3. They don’t trust experts: having an experienced Buyers Agent on your side will ensure you make the right purchase, rather than listening to friends and family who have never purchased investment properties but will happily give advice on where are the ‘hottest’ suburbs to buy.
  4. They don’t realise how easy it can actually be: they have gone to their bank, which said they don’t qualify for a loan. Now they feel dejected and throw their hands up in the air. It takes being proactive to seek out the answers you want and not giving up until you get the outcome you want.

Many clients experience the excitement of buying their own home and then get into the habit of simply paying their mortgage down monthly. There is nothing wrong with this, but the mentality of ‘set and forget’ is where banks tend to make money from complacent customers. When was the last time your bank called to let you know you could actually pay down your home loan faster, or that you were entitled to a lower interest rate?

This example looks at clients who were guilty of ‘setting and forgetting’ their mortgage.

The Situation

  • The couple with their two children moved into their dream family home four years ago
  • They had their 20% deposit and went back to the bank they had used for the last 8 years
  • Since buying their home, they made their monthly repayments while continuing to maintain a balanced lifestyle of regular holidays, paying school fees, and a recent new car purchase.

The Opportunity

  • After a chance conversation with a colleague at work, the client realised their interest rate was 0.75% higher than the colleague’s rate
  • On their $600,000 home loan, this meant the difference was $265 per month between their current repayment and the lower interest rate
  • The client also realised they were paying an annual fee and monthly fees for their transaction accounts as well as a credit card fee.

The Outcome

  • Not only did the client and her husband switch to a more competitive home loan, they received a sharper interest rate as well
  • They now saved over $300 per month, which works out to be $3,600 for the first year alone
  • We structured their home loan to use the benefits of an offset account more effectively, which in turn saves even more interest in repayments per month
  • We changed their repayments to fortnightly and increased each repayment to assist them pay down their mortgage faster
  • With an estimated saving of $3,600 they are on track to pay down their home loan in 20 years rather than the standard 30-year term, which will significantly save on interest paid over the life of the loan.

To learn how you could save more each month by having the right structure in place for your home loan, please get in touch. We would be happy to help you.

The concept of using equity to purchase an investment property can enable clients to launch their plans to build a successful property portfolio – whether it’s to buy one additional property or purchase several more.

We have taken a number of clients on this journey and now they all have thriving investment property portfolios which will lead to financial freedom in the long term.

Darren and Ashley were great clients who had the right idea – pay down their mortgage as fast as possible. In doing so, they had equity in their home to assist with purchasing their first investment property. They realised they wanted to build a portfolio, which would assist with their retirement in twenty years’ time and also build wealth along the way.

The Example of Using Equity

  • Their home is worth $850,000
  • Their current home loan balance is $350,000

As investors, they accessed up to 80% of the equity in their home, less their existing loan, to assist with purchasing an investment property. Therefore 80% of $850,000 = $650,000

Total available equity = $650,000 – $350,000 = $300,000

They purchased an investment property for $400,000 and also needed to budget $20,000 for additional costs such as stamp duty, legal fees and disbursements. Their total costs are now $420,000.

Using the equity in their home, they funded the 20% deposit and costs which was $100,000 (i.e. 20% of $400,000 and $20,000 for costs).

They also had a separate loan for the 80% lend against the investment property, which was $320,000.

The rental income for this investment property serviced the 80% loan of $320,000 and the loan of $100,000.

The Outcome

As Darren and Ashley gained confidence, they repeated the process and have now purchased four investment properties – all funded from the equity in their own home. Importantly, they have also protected themselves from over leveraging their properties’ equity by continuing to pay down their primary mortgage.


If you would like to know more about using the available equity in your own home or in your investment property/ies to build an investment property portfolio, let us show you how this is achievable.