We have provided a number of case studies below based on loans applications we have submitted recently.

Case Study 1: Jason Dubai UAE

Jason came to MAP as a referral from an existing client. We never actually spoke with Jason on the phone or via Skype until well after he was pre-approved (not on purpose, just never happened). We discussed everything via email and  Jason emailed the required documents to us. 

 Jason had a substantial deposit and could easily cover the 20% required to avoid mortgage insurance. However, he wanted to buy more than one property.

 Pre-approval: 

After we had discussed the lender options we had, we emailed Jason a list of documents required.

 We arranged two $300,000 pre-approvals for Jason at 95% LVR so he only had to put down a 5% deposit ($15,000) on each property and then simply cover the costs of stamp duty.  

 Jason had his parent’s shortlist a number of properties for him. He then took a 2 week holiday to come back home, had a look at them and made 2 offers which were both accepted. 

 Property 1:

Purchase price NSW $287,000. 95% lend meant Jason needed a $14,350 for 5% deposit plus stamp duty of circa $8820 (investment rate NSW). Allowing for conveyancing and extras $2000. 

Total funds required out of Jason’s pocket: $25170. The mortgage insurance that was charged here was $5500 added to the home loan. 

If Jason put down a deposit of $57,400 (20%) plus costs then he could have avoided paying mortgage insurance however to do this would have meant he could only buy one property. Importantly in this instance the mortgage insurance was added to the home loan and not paid out of pocket upfront. 

Total loan was therefore $278,625 (95% of $287,500 = $273,125 plus LMI of $5500). Repayments here were interest only $1372 per month. Rental income from this property was $280 per week. 

Property 2:

Purchase price $190,000. 95% lend meant Jason needed $9500 plus stamp duty of $5425 (investment NSW rate) and $2000 for conveyancing and extras. 

Total funds required: $16,925. Mortgage insurance was $3900 and added to the home loan. Total loan was therefore $184,400 (95% of $190,000 plus LMI of $3900). Repayments on this amount were $908 per month interest only. Rental income here was $175 per week. 

On advice from Jason that his offers had been accepted we contacted the real estate agents and arranged for a copy of the contract and a real estate letter confirming the rental income to be expected from the property. On receipt of this we lodge with the lender who then orders a valuation. Upon return of the valuation, presuming it has come in at the purchase price, the lender will issue an unconditional approval. 

 Unconditional Approval:

Jason pays the required deposit (in this case 5%) by electronic transfer. 

We forwarded a copy of the approval to Jason and called solicitor to advise and provide them with a copy. Once Jason was happy with everything he paid the required deposit under the contract (in this case 5%) by electronic transfer. 

We then arrange for the mortgage documents to be posted to us, confirmed that they were correct, emailed Jason a copy (only for viewing) and then forwarded the originals by international courier to Dubai. The time to arrive in Dubai from Australia was 4 business days. 

Jason then signed the documents, had them witnessed and provided some certified ID and posted back to MAP. MAP checks the documents are correct, retains the certified ID for our compliance, and then hand delivers the mortgage documents to the lender. 

 Upon delivery of the documents we advise the solicitor that documents have been returned and that they are free to call up and book in settlement. Once settlement is complete we confirm with the bank the repayment date, amount of repayment and from what account the repayments will come from and forward this to Jason. 

Wayne and his wife are both Australian Expats teaching in Texas. They already had one investment property in Australia and were interested in buying another however did not have much of a deposit saved up. What they did have though was equity in their current property.

Wayne estimated his investment property to be worth about $280,000 and had a loan of around $180,000. We arranged for a bank valuation to be done and as is fairly normal these days, the valuer came in lower than owners estimate and valued the property at $250,000. Valuers are very conservative, I have no doubt Wayne could achieve a greater figure if he sold but banks are valuing as if it was a fire sale. 

Lenders will as a rule permit a refinance or top up to 90-95% LVR. What this means is we take the value (as provided to us by the bank valuer) and times it by 90 or 95%. In this instance we did 90% so $250,000 x 90% = $225,000. This is the max loan the lender will do on this property. We then take away what Wayne already owes ($180,000) and there is $45,000 available equity for Wayne to use to buy his next property. This equity was released to Wayne directly into his bank account. 

At the same time as arranging the refinance and releasing the equity we also applied for a pre-approval for purchase price of $350,000 at 90% LVR. 

Wayne used Tony Boulden, a buyers agent on the Gold Coast to help him find a property and Tony found him a bargain for $316,000 with a weekly rental of $380 per week (unheard of, but that’s why it can pay to use a buyers agent). As Wayne was already pre-approved all that was left to be done was arrange a valuation on this property which was fine, and unconditional approval was issued. 

The LMI here was around $3031 so total loan was $287,431 (90% or $284,400 + LMI of $3031). Repayments here on this amount are $1,422 interest only per month. Total funds required to complete purchase: $43,800 (being 10% deposit, $10,200 in stamp duty and $2000 for conveyancing, rates adjustments etc. We had $45,000 from equity so Wayne didnt need to provide a cent of his own funds.

We then had documents posted to us and we forwarded on to Wayne by international courier. Wayne then completed the documents, had them witnessed, and then posted back to MAP. We then delivered to the bank and solicitor booked in settlement.

Greg was an Australian Expat who married a foreign spouse. Both Greg and his spouse purchased a property together in Australia and there were no issues here in obtaining over 80% LVR. No FIRB approval was required either.

 Greg and his wife were teachers in Shanghai and were looking to buy a property in Canberra as an investment for now but as somewhere to live when they decided to move back home. 

We obtained a pre-approval for Greg and his wife at 95% to purchase in Canberra an investment property. Greg did have more funds to cover a bigger deposit however he initially wanted to purchase two properties. In the end he only purchased the one. 

There were no major issues with Gregs loan. Once we discussed options, Greg and his wife made a decision, emailed all the documents and we lodged for pre-approval. Greg then had his parents shortlist and actually pick out a property for them without Greg or his wife ever seeing it in person. 

The purchase price was $445,000 and at 95% we obtained a loan for $422,750 with mortgage insurance of $9200 capitalised on top for a total loan of $431950. Repayments on this amount were $1,814 interest only per month however Greg and his wife elected principle and interest repayments of $2,329 per month. 

Valuation was ordered, Greg has his parents in this instance post the documents to him in Shanghai, they were returned and everything else went smoothly through to settlement.

Pat and his fiancé are Australian Expats living and working in London. Pat is in property development while Tonina is a lawyer. They had found a property they wanted to buy and had agreed on terms with the seller. They initially went with another big brokerage firm Mortgage Choice who advised them that the maximum lend they could do was 80%. They were then referred to MAP from a colleague of theirs who we had helped previously. Pat and Tonina had an excellent deposit, around $150,000 AUD however the property they were buying was $850,000. Stamp duty on this in Melbourne was $47,518 which left Pat and Tonina only $100,000 as a physical deposit.

We advised Pat and Tonina that we could assist and we ended up doing a 90% lend with LMI capitalized on top. This left Pat and Georgina with about $15,000 left over as a contingency fund really, but we arranged to have this put straight in the home loan to save on interest but available in redraw.

 The figures for Pat and Tonina were: Loan amount $765,000 with LMI on top of $14,100 total loan $779,100. Repayments on this amount were $3570 per month interest only. Rental income for this property was $650 per week.

Mark and his wife are Australian expats living and working in Singapore. Mark works for a large global company while his wife Sandra is a teacher at an international school. 

Mark and Sandra wanted to purchase a 2 million dollar property in Melbourne. We provided all the options including borrowing to 90% however Mark was happy to use a 20% deposit. We therefore arranged an 80% lend or $1,600,000. As they had a 20% deposit no mortgage insurance was payable here. 

Because of the large borrowings (over 1mil) we arranged an interest rate 0.27% below some of the competitors. On $1,600,000 this amounts to a whopping $4,320 a year in interest saving.