A semi-retired stock investor with properties in Singapore, aimed to secure financing for his initial overseas property investment in Australia despite not being employed in recent years.
As many have known, the amount of one’s net disposable income directly affects how much he or she can borrow in loans. Needless to say, loan approval for a residential property without a primary source of consistent income is almost impossible in Australia, especially for foreign investors. Our major concern for this application was that our client did not have employment income history at all in the most recent 2 to 3 years. He was retired and had been a full-time stock investor for the last couple of years at the time when he was engaging in this loan application with us.
With his high net worth financial status and his long standing investment history with a relationship manager working in a large Singaporean private bank, the borrower was under the impression that he would be able to easily obtain finance from any domestic bank. To his surprise, his initial application was turned down by the bank he reached out to personally, on account of lacking employment income evidence. Not to mention, the volatility and the risk exposure of the investment income he generated in recent years from the stock market was also deemed unfavorable in this scenario, thereby limiting the net disposable income amount that can be considered to maximise his borrowing capacity.
On the strength of our breadth of experience in this field and also the client’s honest disclosure of his earlier attempt through a Singapore-based private banker, we were able to swiftly diagnose the critical issues that would prevent our client from obtaining finance without our assistance.
Once we highlighted these concerns to our client, we then set to work in brokering our client’s scenarios with various credit managers to ascertain what substitutes we could make in place of regular consistent full-time income that we couldn’t present in his case. After a fortnight of credit scenario negotiation, we were able to come up with the following once-off compromises to the standard lending policy, which were customised to the borrower’s financial circumstances at that point in time.
- Rental income evidence from 2 existing investment properties
- Guaranteed return from other endowment and savings insurance plans
- Provide evidence of liquid savings of over $ 1 million
Our client was able to meet all of the tailored credit conditions, albeit the application process took longer than usual to complete due to the borrower’s income aberration, he was elated that we could help him secure a loan at his desired amount, which lowered his cash outflow at settlement and enabled him to utilise the additional equity available for other investments he was interested in.
Our client was pleased with how we were able to present his file in a positive light to the possible lenders, allowing him to be perceived as a trustworthy borrower, thereby unlocking his loan potential in Australia. He is now earning consistent rental income from the property and is using this income to supplement the mortgage repayments.
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