The chef, who kept his job during the pandemic, was “shocked” when his bank threw him back. Here is what he did next.
When Hayden Lee made an offer for a property and then the bank turned it down for a loan, he was “crushed”.
The 30-year-old believed after preliminary talks with the bank that he had no problem.
He had found a two-bedroom apartment in Wollongong for $ 540,000 that he had fallen in love with and managed to save the bail a month earlier than the bank’s deadline.
But his savings of $ 30,000, which would cover 5 percent of the deposit, weren’t enough. In fact, he found that he needed a 10 percent down payment due to the bank’s home loan regulations.
“I was a long-time customer with them and they knew I had paid off a previous (personal) loan,” he told news.com.au.
“They also knew how much I was paid, especially since I worked through the entire Covid pandemic. In my eyes, I wasn’t a high risk investment so I was a bit baffled and shocked by everything. I was pretty upset because I finally wanted to see the place again. “
The chef quickly realized that he needed expert help and that relying on the bank might not be the best way for him.
In a strange twist of fate, the people he wanted to buy the apartment from put him in touch with mortgage broker Joseph Daud, founder of It’s Simple Finance.
Mr. Daud took Hayden’s desperate call and discussed his options, including applying for the First Home Lenders Deposit Scheme.
This ensures that first-time buyers with low to middle incomes can purchase their first home with a down payment of 5 percent.
“Without the system, the disadvantages of a low deposit home loan can be financially crippling,” he said.
“These disadvantages include paying for mortgage insurance from the lender, a low deposit premium, or having to rely on a guarantor. This program offers those eligible to receive up to $ 10,000 per fiscal year. “
It was a win for Hayden as he said he got a better interest rate and it gave him the opportunity to become a homeowner without a huge deposit.
He added that it would be of great help to have a mortgage broker to advise him on everything from legal terms to systems.
Most people are unaware of the options available to them, noted Mr. Daud, and often find the process “intimidating”.
“The hardest part is that people don’t know the systems that apply to them, and they don’t know that they can buy with just a 5 percent down payment and then get an additional $ 10,000 for a home in NSW with an initial home equity grant under $ 600,000, “he said.
“People in NSW can buy a house with just $ 28,000 deposit, but they think they need to save $ 80,000 or over $ 100,000.”
Mr Daud, who owns four properties for investment, including one in Tasmania, said a simple Google search would help people understand what could help them get home and what to do.
He said getting the right information about whether you are planning to buy or live in a home for investment is also important.
“It’s always a good idea to get a second opinion … Hayden was about to go to his bank and then he found out he wasn’t going to be approved and needed help making this purchase,” he added.
“Just through a second opinion or a second person who gave him a Plan B, and when it comes to buying a property, it’s good to have a Plan B and it’s not the kind of thing you do the boats burns and goes with one person. “