Where they were starting from
The couple live in Cairns. They own a block of land in Tweed Heads and plan to build their family home on it and move down. On paper that sounds like a straightforward construction loan. In practice it was a lot of moving parts at once: a land loan sitting with one lender, self-employed income, both of them relocating close to two thousand kilometres and across a state border for work, and, part way through the process, the very happy news that they are expecting a baby.
None of those things on its own is unusual. Put them all in the one application and the order you do things in, and the lender you choose, start to matter a lot.
Step one: refinancing the land
Before we could talk about the build, we needed the land loan sitting with the lender that would fund the construction. So the first part of the application is refinancing the block across to that lender. Having the land and the build with the same bank keeps things far simpler once the progress payments start, and it means the lender is assessing the whole picture from day one rather than being asked to take over halfway through.
Two incomes, two very different conversations
He is self-employed and works as a subcontractor to a national company. When you are moving interstate or outside of driving distance, a lender wants to know your income is coming with you. Because the company he subcontracts to operates nationally, his work continues in Tweed Heads just as it does in Cairns, and we were able to show the lender exactly that. If you want to understand more about how lenders look at this kind of income, our self-employed home loans page and our post on proving self-employed income are a good place to start.
Her side took a bit more work. She is employed by the education department, and Cairns to Tweed Heads is obviously not a daily commute. A lender looking at an owner occupied home that far from her current workplace needs to see that her job is moving with her. We worked with her to get a copy of her transfer letter confirming her position in the new area, which gave the bank the certainty it needed.
Borrowing capacity versus what actually feels comfortable
Once the incomes were sorted, we sat down together and worked through their borrowing capacity. The number a bank will lend you and the number you are comfortable living with are not always the same, and we spent time on both.
Just as important was protecting their savings. With one of them self-employed, income can move around, so keeping a healthy buffer was non-negotiable for us. There are always costs at the end of a build that people underestimate, like landscaping, driveways and furnishing a brand new home. And life has a way of throwing in the unexpected. We structured the lending so they could build without draining every dollar they had.
Then came the baby
A few months into the process, they let me know they were expecting. Congratulations were the first order of business. The second was working out what it meant for the loan.
Banks are not worried about you going on maternity leave. What they want to know is your plan for it. So we mapped it out properly. We looked at her normal income, how much paid leave she has through her employer and how that would run whether taken at full pay or half pay, and what government parental leave pay she will be entitled to. She plans to take twelve months off, so we worked through each stage of that year to see exactly what would be coming in.
The gap between that and their normal household income came to a couple of thousand dollars over the period. Not a big number, but it is the kind of detail that matters. We confirmed their savings buffer comfortably covers it, documented the plan, and the lender is completely comfortable with it.
It is not that maternity leave is a problem. It is that someone needs to take the time to understand there will be less income for a while and make sure the family is set up to handle it.
Why this is where a broker earns their keep
Look at everything happening in this one application: self-employed income, a land refinance, a construction loan, an interstate job transfer and parental leave. Each lender has its own view on every one of those things. Some are comfortable with a transfer letter, some want more. Some treat subcontracting income differently. Some have their own way of assessing a planned return to work.
With more than 50 lenders on our panel, our job is to know those differences and put the application in front of the right lender the first time. That saves clients the stress and delays of a decline, and it means the application is presented with the full story and the right supporting documents from the start.
This family now has a clear path from Cairns to a new home in Tweed Heads, with room in the budget for the baby, the landscaping and whatever else life brings.
Building, relocating or juggling a few moving parts?
If your situation has more than one thing going on, that is exactly the kind of conversation we enjoy. You can meet the team or make an appointment and we can work through it with you, face to face or online, wherever you are in Australia.
