Ebony Rose Loans – who are our clients?
Walter and Betty are a married couple in their late 50s. Walter has been self-employed for more than 20 years. Betty works part-time at the local pharmacy. They have had some tough years financially with income down for a few years, until about a year ago, when Walter was able to sign new clients to long-term contracts. However, during those tough years, their debts dramatically increased trying to make ends meet during a time they should’ve been planning for retirement. Their mortgage increased from $550,000 to $640,000, they took out a $30,000 personal loan, and they had accumulated $35,000 in debts over three credit cards.
They came to us drowning with over $5,850 per month in debt repayments. They could not see a way out.
During our meeting we recommended our self-employed product. Even though they had some lean years leading up to the last 12 months, via BAS statements and trading accounts we were able to provide the lender with enough evidence income was improving.
We were able to recommend a strategy whereby the lender recognised that not all loans are exactly the same and being able to provide evidence income was on the improve, a reorganisation of commitments to a more manageable level and a payment plan to have their loans consolidated into one manageable commitment, the lender approved the new loan.
We were able to:
- consolidate the couple’s debts,
- cancel their credit cards and personal loan,
- their monthly commitments went from $5,850 to $2,765 per month, and
- create a plan to have the new loan paid out before retirement.
Mum and Dad
Stephen and Elizabeth bought their property in 2011 for $680,000, and the initial 30 year mortgage was for $480,000. Today they are in their mid-40s and have three children with an outstanding mortgage balance of $380,000.
Stephen is a miner and Elizabeth works part-time for the state government. They have a combined income of $165,000 pa and have lived in their home for 8 years (which is currently worth approximately $850,000). For many years they had hoped to invest in property, but life has always stopped them from moving forward.
The couple also only have $250,000 combined in their superannuation accounts.
They approached us to assist with setting themselves up for retirement and ensuring a future where, should the need arise, they can financially help their children.
We recommended a strategy to assist with the purchase of three investment properties. Firstly, using the equity they have established in their home to purchase two investment properties. Secondly, using their available combined superannuation, to purchase a third property via the setup of a new Self-Managed Super Fund (SMSF), recommended by their accountant.
With confirmation from their accountant regarding the setup of the SMSF along with the tax and other benefits associated with the strategy, we added the next piece of the puzzle in setting up the finance to assist with the purchase of the investment properties. This strategy will allow Stephen and Elizabeth a comfortable retirement with passive income from the investment properties with little or no debt.
We were able to show Stephen and Elizabeth:
- How the mortgages will be clear in just over 11 years through our advice on rent, tax and depreciation benefits received and the correct repayment structure .
- Furthermore, with a net outlay of $127 per week, their current $480,000 home loan, along with the equity release of $250,000, assists with the deposit and costs for the purchase of the two investment properties.
- And, if they continue to adhere to this advice, all their loans, including the new investment loans will be paid out in under 21 years.
Frank and Maria are in their early 40s. They have two young children and have run a successful soil testing business for the last 14 years, which employs eleven others. They live a comfortable life and approached us to assist with a top-up loan on their mortgage for home improvements.
After the initial consultation, an opportunity was recognised and presented to them for further consideration. During the preparation of loan application forms, it was discovered the business was operated out of two side by side rented factories. With over $360,000 in their combined super accounts, we advised they seek further financial clarification from their accountant about setting up a new SMSF to help purchase commercial property for the business to operate. After meeting with their accountant whereby the benefits and tax implications of this type of strategy were discussed, Frank and Maria consolidated their super into a SMSF. We assisted them with the finance so they could purchase two side by side factories from where their business now operates.
For our team it was about:
- recognising possible opportunities
- understanding the customers needs,
- directing them to seek the best possible advice, and
- assisting with the implementation of the finance they require.