When fixing a problem where do you start? Do you start in close at the problem or do you look at the bigger picture? Sometimes if we look too closely to the problem we miss issues that are in the big picture and therefore our solution is just a short-term fix or does not work at all.
How do I apply my theory to home loans? I like to think of our team at Loan Strategists. We look at the big picture and make sure we look at all the angles when creating our loan solution.
I recently helped out some clients who had a couple of issues we needed to overcome
Issue 1: Their savings was low for the property they wanted to buy
Issue 2: Their borrowing capacity was tight
How did we solve these two quite major issues?
Solution 1: We spoke to their parents and they were happy to go guarantor. This resolved the issue to have a larger deposit. However, this also increased the problem with issue 2 as this increased the borrowings.
Solution 2: So now that we have the guarantor this borrowing capacity issue is even bigger. We found a solution by paying down some of their personal loan which reduced the monthly repayments. We did not pay the loan out in full for a couple of reasons – 1) we wanted to keep some money so the guarantee was not too big for the parents 2) we did not want to pay the personal loan break fee
Both solutions took into consideration – what is in the best interest of the clients to get them their property, what is in the best interest of the guarantor to minimise the risk and we also looked at what the lenders would look upon favourable when we put through the application to ensure the application will be approved.