With serviceability and affordability getting harder, we have asked brokers at the FBAA conference: what loan products do you want to see from lenders to help more clients?
More loans for temporary residents
With an increase in work visas, immigration visas and student visas, it would be great to see the lenders provide better opportunities for newcomers to Australia to buy property here. It would take pressure off the rental market.
Banks are secured via the property title and many of the visa holders are keen to stay and settle in Australia. If they don’t get their permanent residency they can either sell or hold the asset in Australia and add it to the rental market.
This content is available exclusively to
The Adviser premium members.
The government wants to see stability and people contributing to Australian economy, this would be a great way to prove this.
Jamel K Singh, finance consultant, Fin Plus Pty Ltd
85% no LMI loans for emergency service workers
As an ex-police officer myself, I would love to see more lenders support our emergency services workers who dedicate their lives to the safety and wellbeing of our communities.
Offering an 85 per cent lend with no lenders mortgage insurance (LMI) for emergency services workers who make countless sacrifices for the betterment of the community would symbolise our recognition of their importance and provide a pathway for them to secure their financial future.
Considering the job security our emergency services enjoy, this is a benefit not only to applicants, but also to lenders who would adopt these policy changes.
Travis Carruthers, principal lending specialist, Virtus Mortgage Broking Services
A 'hybrid’ low-doc loan
As brokers know, working solutions for clients can be challenging and, in many cases, we might need to use alt (low) doc options available. However, it seems to me that, where you might have a self-employed individual using alternative means of income verification and applying alongside a PAYG applicant, there should be more favourable terms offered by the lender.
If you have an applicant using an accountant declaration or business activity statement (BAS) to verify their income, the lender may offer a higher rate product. But, if the client’s co-applicant is a salaried income earner, perhaps the lender should offer a rate discount for this product?
Spencer Clarke, mortgage broker, Cube Central
An ‘internal’ offset account
The idea of an internal offset would mean clients could do away with needing to manage a home loan and offset account by having everything under one account number. If they could then have access to this account with a bank card, they could make purchases straight from the redraw, they could set up direct debits, make BPAYs from it, etc then this does away with the need for clunky apps and would be very much the “new age” of a simplified “one account” mortgage.
The biggest beneficiary might be a simple first home buyer who doesn’t like banking and the oversale of accounts, fees, credit cards, etc, but also there would be a major call from investors/
Advantedge has a similar product to this and I have a lot of investors that like it as they can just flick their accountant a mortgage statement at the end of the year and all expenses and costs are there.
I’d like to see someone taking the next step and making something “big branded” that changes the face of products out there.
Sam Arthurs, mortgage broker, Loan Market Warrnambool
[Related: The Word: What trends do you expect to see this spring selling season?]
