Broker Advice Required

Hi Brokers,

I would like to request your advice on our current situation and also potentially help with brokering new loans when the time arrives.

I currently have a credit default which runs off my credit report in middle May 2018 and currently have two loans (Resimac) on two different investment properties both roughly around 6% with LVR < 70%.

My wife and I were looking to refinance when I have a clear credit file, however we are expecting our first child and she will be on maternity leave from April 2018.

Could you kindly advise what would be the best strategy and how difficult it would be to refi back main stream bank with lower interest, and also banks views towards maternity leave. Also are IO investment loans still currently available on the market

Any advice is greatly appreciated.

Dave

 

Depends on servicing. Seek specific advice

 

Steps:
- Work out whether you can do refi back without her income. If so, you'll have several lending options
- If not, test whether you can refinance including her income. If yes, than consider obtaining evidence of return to work arrangements and planning ahead for this. Some lenders can use this and you'll be able to refi back to mainstream rates.

If you require her income for servicing, than you'll likely need to go to mainstream lenders that have favourable mat leave policies. Some take current income (possibly nil or minimum wage), some take 50% of return to work income, others take the full return to work amount with an explanation around how repayments may be made while on mat leave.

What are her return to work arrangements like? If you can demonstrate it (e.g. a letter from the employer stating return to work timing, terms, hours, etc), than you should be OK to use her income.

 

Thank you for your replys.

• We are both currently living at home and paying no board. I think serviceability is not an overall issue
• Properties are both rented however slightly negative geared due to the 6% interest rate.
• We have saved up sufficient funds which can cover all mortgage repayments for the maternity leave period not including the additional to the maternity leave pay that she will receive (5 months).

Can I please ask for timing if my credit file gets cleared say on 18th of May, when would it be a suitable time to see a broker to get the ball rolling?

many thanks

 

I'd touch base with an investment focused now - I prefer it when clients give a little bit of time for planning as this means you can hit the ground running once the file situation improves.

That way you can find out the exact options available and then get the prep work together once it's closer to the time. I'd personally be looking at it from a more high level approach, then narrow into the best specific product/lender option when it is about to clear as the finance market is quite fast moving - what is great today may be trumped by an alternative lender tomorrow.

 

What's the default and how big is it? You may be fine to move now depending on what it is.

 

It was a credit card default $4k, with St George bank who sold to Credit corp which I paid off in full.

 

At least a couple of the big four will consider defaults like yours alongside an explanation of the default circumstances.

Having a good repayment history with the non conforming lender is a definite plus.
I would have suggested trying with a mainstream lender after 12 months with the non confirming lender regardless that the default is still on the credit file.


Being on maternity leave makes it a little more complicated, but not much. Most lenders have clear maternity leave policies to navigate. It’s not another downside necessarily.