The Road Map Conversation

Life happens. Sometimes people just aren’t in a position to buy or refinance property at this exact moment. It could be because of a myriad of reasons, such as:

They are in the middle of a divorce.

They have just had a 12 months off unpaid with young children.

They started a new business and its taking time to get to break even.

They have an outstanding ATO debt or payment plan (hot tip, there are in fact ways around this).

They have just been through a prolonged period of ill health and don’t have any income this financial year (or alternatively are receiving income protection insurance, we can help with that).

They have good income but cant seem to get the deposit together before the funds go out the door again.

On average, twice a week I have the “Road Map Conversation” with someone. The conversation that lays it all out and lays down a plan to get you to the point where you can purchase that home you want, or the investment, or refinance.

It may look like this:

Lara had been separated for 2 years. A financial agreement was being worked towards and the family home on the market. Lara had not worked significantly in a full time capacity since before the kids were born, working part time and casual jobs as a psychologist. Lara and her kids were renting in the same neighbourhood her kids were going to school in, so as to minimise disruption to the kids lives.

Lara had a range of what her divorce settlement lump sum was going to look like, as well as child support. She really wanted to stay in the same area (Sydney, Northern Beaches), but understood she would not be able to afford a mortgage on a free standing home, so was willing to compromise and look at purchasing a townhouse or garden apartment. Based on Lara’s desired price range around the $1.7m level, plus transaction costs which we outlined to her, she did not currently have an income that supported this price. As a result, we recommended:

• Lara seek out full time employment with an income of at least 130k pa. With one week on and one week off living with her children, in her chosen career this was doable. Some lenders will accept an employment contract and just one payslip and as such she did not have to be earning this income for very long before becoming eligible (hot tip - needing to be at this employer for 6 months is a myth).

• Lara really needed to look in the lower $1.6m range, which perhaps meant looking a suburb over from where she was to get the features she wanted.

• Lara needed her living expenses to be under $4,700 per month, and in particular reduce her entertainment expenses by $500 for the foreseeable future at least whilst her application was under consideration.

• Lara was going to need to reduce her credit card limit to $2,000 (or close it).

This conversation cost nothing to Lara, but she now has a ‘road map’ of exactly how to get to a position where she can make an offer on a home for her and her children, and afford to live there without significant financial stress.

As I write this, Lara is still trying to finalise her divorce, but the minute the binding financial agreement is formally signed, she is prepared to move forward knowing her plan. She may or may not come back to me, and thats fine, we are just happy to assist her to have made a plan.

TLDR? Sometimes clients just need a roadmap of how their situation needs to look to buy or refinance property. Contact us if you need a road map discussion.

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