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Meet Ben and Avril. Although their application didn’t meet traditional lending criteria, Pepper Money was able to help them achieve their goal of purchasing a third investment property.
Ben and Avril are a couple focusing on wealth creation looking to buy their third investment property valued at $800,000 and are seeking to borrow 75 per cent of the property price. The balance of funds will come from redraw on another loan, plus savings.
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Just over 12 months ago, Avril bought a 50 per cent 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 old and is registered for GST.
Ben has worked as a senior HR manager for an energy company for the last four 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 Veda 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
Based on the facts above, the broker suggested Pepper Money to Ben and Avril.
After reviewing their situation, Pepper Money was able to assist the couple with a Specialist Alt Doc 75 per cent LVR loan which accepts Ben’s default since it was registered over 24 months ago. At a 75 per cent LVR, the requested loan amount falls within Pepper Money’s policy (which would allow for a maximum loan size of $1.75 million at 75 per cent LVR).
The couple were also able to benefit from Pepper's $0 upfront fee promotion (effective until 24 February 2017) so Ben and Avril were able to save over $1,800 in fees.
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 six 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 for over 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.
