I appreciate how much you want this, but I have to say NO!
Melina dreams of living by the ocean, spending her days surfing and sailing, sun kissed and salty. She finds the perfect property tucked behind the sand dunes, a mere 3kms from the nearest beach. Views for days across the forest and a tidy little cottage she can rent out for extra income because have you seen the price of a decent wetsuit lately people?
Melina signs the OTP and assures Gordon, the overly eager estate agent, that it is a done deal. She confidently submits all her documentation to Alice, the bond originator with a bad attitude.
No one is more surprised than Melina when the banks come back with a resounding NO!
Wait, what!? How!?
Melina runs her entire life through her company. She draws a small salary, just enough to cover medical aid and insurances. The rest is carefully squirreled away into stocks, crypto and savings. At the end of each month, her company accounts looks like Old Mother Hubbard’s cupboard – bare!
All her investment properties are in a trust. Her car and schmancy laptop? All belong to her company. On paper, Melina is as poor as a church mouse and the banks do not approve.
Interesting situation since Melina actually owns millions of Rands worth of property, locally and internationally.
If you are a business owner, it is worth noting how Melina got herself into this tricky situation and how YOU can avoid it.
Never draw all the income out of your business, leave a nice slush fund in the business to show it is running at a profit
When submitting documentation to the bank, ensure you discuss your goals with your accountant so a set of bank ready books can be prepared for submission
Get a bond originator who understands how you have structured your finances so they can see past the black and white and into the fabulous future you have constructed for yourself
As for Melina? Once she calms down to a riot and can discuss the situation without using language that would make a sailor blush, she reminds herself that sometimes not getting what you want is a wonderful stroke of luck – AND finds herself a new bond originator because if at first you don’t succeed, try and try again
