At Launch Finance, we recently helped a husband and wife who were looking to purchase their new dream home.
They owed no money on their owner-occupied property, but had a fixed rate loan secured against their investment property which also used their owner-occupied property as additional security. In order to put an offer on the dream property, they were going to have to make the offer subject to the sale of their existing owner-occupied property. To add an additional complication, given that the investment property was partly secured against the current owner-occupied property, it looked like the clients would have to refinance their investment loan, and potentially incur significant costs for “breaking” the fixed interest period.
The couple did not want to make an offer on their desired property that was subject to the sale of their existing home as they knew this would make their offer unattractive to the vendors of their dream home.
After consulting us for guidance, we identified that the client’s were in a financial position to be able to invest funds into a short term, term deposit. The lender considered this adequate security for the clients to enable them to sell their current home whilst not breaking their existing fixed rate investment loan. The husband and wife were delighted that this strategy allowed them to make an offer without the “subject to sale” clause, and as a result, they were able to secure their new home.
After doing some further research, we also confirmed there were no break costs associated with an early refinance of the fixed rate loan, which was a pleasant surprise for the couple. Launch Finance was able to take away the worry of a possible quick sale and potentially restrictive terms on their newly purchased home. With our professional and dependable advice, the couple are now able to enjoy the home of their dreams.
If you are contemplating purchasing a new property, and have similar issues, call your Launch broker today to discuss.