Liberty offers ‘free-thinking approach’ to investor loans

“If you’ve got a client who wants to invest in property and has an existing portfolio, you’ll need to look beyond the banks, to lenders like Liberty that have a more free-thinking approach to how to treat existing investment debt,” Liberty Network Services managing director Brendan O’Donnell said.

“If every dollar counts – then it may be time to put other lenders in front of your customers.

“Knowing your options as a broker will always improve your outlook, but finding a partner that’s just as determined to embrace change and forge ahead in the industry is even more important in times like these.”

Mr O’Donnell said APRA’s investor lending curbs are changing the way the industry operates.

“It’s even been reported the banks have had tens of thousands of customers ask to reclassify their loans from investor to owner-occupier, which is taking time and effort to sort out,” he said.

“Then there’s stress testing. In recent months brokers submitting investor loan applications to some lenders have seen their clients being subjected to stress testing on the monthly payments for their existing investment loans, as well as the new loan.”

Mr O’Donnell said this has the consequence of altering serviceability results and potentially decreasing the borrowing level, which, in a competitive property market, can be the difference between closing the deal with your client, or not.

“Because of the nature of what brokers do, they will always find themselves at the centre of any industry change,” he said.

“Preparing for the new normal – an environment where brokers need to be acutely aware of how to best service their clients – is something they need to embrace. Thankfully, there are alternatives.”

Smartmove co-founder and director Simon Orbell said his Sydney brokerage is already starting to use specialist lenders for investor loans.

“Just in terms of that more unique approach that some of the smaller players with a more nimble approach can take towards serviceability and some of the credit policies and niches they create,” Mr Orbell told The Adviser.

“We think that will only continue as lenders realign themselves and find out where those new niches fit.”

With the third-party channel adapting to pricing and policy changes, Mr Orbell said specialist lending is something that most businesses should be looking at a little more closely.

“Not necessarily for the non-conforming deals but more the specialist piece for investor,” he said.

[Related: Brokers find alternative solutions for property investors]