Behind the Deal: Guildford NSW | $1.3m

With their short-term capital loan at term, these commercial borrowers wanted to refinance into a longer-term solution – and consolidate two loans into a single facility. 

When these commercial borrowers were looking to refinance their newly constructed duplex, they wanted a long-term solution that would allow them to live in one property and keep the other as an investment. Assetline Capital had already helped them in the earlier stages, with construction finance and short-term capital. However, their existing short-term finance was coming to term and their plans had changed – where the duplex had been developed as two investment properties, they now wanted to retain one to live in. Assetline Capital had a well-established relationship with the clients and their broker. The Assetline Capital team knew the clients had excellent serviceability and a low LVR, but the serviceability buffer required by the major banks meant they couldn’t borrow as much as they wanted. A long-term Horizon Mortgage was the answer and because of their history with us, they knew we could deliver.

Initially, the broker was looking at the deal as two separate facilities – one for the owner-occupied property and one for the rented one. This would have meant the client would need to pay two sets of establishment fees, interest and principal repayments.

There was an additional complication as the client was refinancing out of a development loan. Many lenders would only consider a residual stock loan, as technically the borrowers had completed the development and now wanted to hold the stock – but they needed a longer-term facility.

Because their existing short-term private lending facility was at term, the borrowers needed a quick turnaround to avoid penalty interest.

Being previous Assetline Capital borrowers meant we already had their information, which made the process easier. As they were applying for an Alt Doc Horizon Mortgage loan, the clients only needed to provide an accountant’s declaration to verify income. We completed thorough due diligence, but there was no need for them to submit bank statements or undergo comprehensive credit reporting which saved valuable time.

While the properties had both been completed, the investment property wasn’t rented at the time, so we used projected rental income to calculate serviceability.

The broker had direct access to decision makers, which sped up the process and enabled us to be more flexible – as we fully understood their circumstances, we could structure a loan that suited their specific needs. By rolling the two properties into a single loan facility, the client was able to save on establishment fees. They were also able to borrow more than they could from a traditional lender, including $50,000 in working capital for their business.

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