This article shows you how to create BrokerEngine funding positions for two transaction types: debt consolidation as equity release and cross-securitised loans.
Contents
Prerequisites
Know how to create a funding position.
Video walkthrough
Watch Craig demonstrate how to create two kinds of funding positions. This video uses our old user interface, however the Funding Position page is almost identical in our new interface.
Creating an equity release funding position
Follow these steps to create an equity release that generates surplus funds.
In his scenario, the client has a property now valued at $500k and loans that total $300k. The client wants to refinance the current loan and release $100k of home equity.
Open a funding position.
Go to the Deal Type and select Refinance/Debt Consolidation.
Select a Lender and Package.
Scroll down to the Funding Position Detail section.
Go to the Valuation field and enter the value of the client's property.
Go to the Existing Loans to Refinance field and enter a figure.
Go to the Base Loan field and enter the total for the client's new loan (e.g. 80% LVR).
Add other fees if applicable.
The green bar at the bottom of the section shows the available surplus funds generated by this deal.
Next, scroll down to the Loan Splits section and click the Calculate Loan Splits button.
In the first split, enter the value of the current home loan. In the second field, enter the value of the proposed equity release loan (if required, click Add Split to display a new row). Click Apply and Yes in the confirmation popup.
Scroll down and enter loan product details for each split. Click Save. The equity release funding position is now complete.
Creating a cross-securitised deal
In this scenario, a client owns a home valued at $1.1 million. The home has $300k in loans. The client wants to release $600k of that equity to purchase a second property. Here's how to structure that financing in a funding position.
Open the client lead or deal card in full view mode and create a new funding position.
Scroll down to the Funding Position Detail section and fill in the fields.
Valuation is the value of the current property.
Purchase Price is the cost of the proposed new purchase.
Existing Loans to Refinance is the loan on the current property.
Base Loan is the value of the proposed new loan (refinancing plus the loan for the new purchase).
Add information as required.
In the example below, the proposed funding position shows total required funds is roughly equal to total funds available.
Creating loan splits
Next, generate figures for the loan splits. In this example, I generate a loan split to release equity and a separate split to refinance the existing loan.
To quickly generate a loan split, scroll down and click the Calculate Loan Splits button. Click Add Split to generate a new row for the second split, if required. Click Apply.
Scroll down to Loan Split 1 and fill in the fields, as described above (e.g. loan type and product). Then go to Loan Split 2 and repeat the steps. Click Save to complete the workflow.
If you generate a Funding Position report, the document shows both loans.
