A loan intended to cover construction costs was also able to pay off personal debt
A woman in her early 20s bought a plot of land around a year ago and was about to begin construction on it. However, due to policy changes, an unstable work history, pending loan, and other personal issues, she had a difficult time getting a loan for the build. Other brokers had turned her down, except Option Finance Australia credit adviser Charlton Wong.
Wong told MPA he initially felt confident about the application. Everything seemed to be hopeful, until he realised the application had serious issues that need fixing and the doubt started the creep in.
The whole loan process took about a month because Wong had to re-submit the application multiple times due to the client’s situation, and had to negotiate hard with lenders on certain points.
“It was very stressful because I needed to think of possible solutions to help her get funding for the construction. She already had the land settled, so the need for a loan was higher than normal application,” Wong said.
In the end, the valuation on the land came back higher than when the client had paid for it. In only a year, the value of the plot had increased significantly, allowing Wong to use the equity on the land to cash out and entirely pay off his client’s personal loan and construction cost.
The biggest lesson Wong took from the experience was “to not be sloppy” — to be thorough with all applications, and to ask clients questions you think lenders will ask you.
“Try to understand the whole scenario from all perspectives, so you can know the whole story and submit the application in the best possible way,” Wong said.
“Be vigilant and curious when looking at documents because sometimes not everything is as smooth as you think.”
In MPA’s happiest client short story series we show-case stand out ‘client success stories’ from brokers and discover what they learnt along the way. Leaving aside the details of the deal, we explore the human side of the story and how brokers really make an impact in people’s lives. If you have a client story you would like to share please email the editor.