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The life cycle of a client

cycle cycle
Emma Ryan 13 minute read

In this feature, The Adviser explores how Pepper’s suite of products can be suitable for every client, at any stage in their life.

Working with a specialist lender is one of the best ways a broker can turn a lead into a client for life.

Not only do these lenders cover your client in the ordinary, vanilla-lending circumstances, they can offer a solution to an unexpected crisis or credit impaired situation, making them a genuine alternative to the banks.

The reality is if you want to retain a client throughout all stages, and setbacks, of their lives, you’ll need to diversify into specialist lending.


And what better way to start than to speak with a lender like Pepper whose niche is in this type of product?

Getting started

The Aussie dream of home ownership is still alive and well, with many young adults seeking out their chance to grab a slice of the property market pie.

Taking out a mortgage is, in a majority of cases, the first thing people will look to do in order to achieve this but before they do, you, as their trusted adviser, should be sure that your client will be able to make the regular repayments that it demands.

Debt consolidation through Pepper is something brokers can recommend to make these repayments more manageable.


At Pepper, debt consolidation draws in all the client’s incurred arrears whether it is credit cards, personal loans, car loans and/or phone bills before placing them into the one loan account, making it easier to budget and manage finances.

Not to mention, those who do this will be granted the one interest rate, be charged less fees and be able to improve their monthly cash flow.

The best part is there is no limit on the amount of debts that can be consolidated into an individual’s home loan at Pepper.

The first mortgage

An exciting time in every Australian’s life is taking out their first mortgage. They’ve gained the financial stability and confidence to make what is arguably the biggest monetary decision they will ever have to. 

While many choose to go directly to a major bank to seek this first mortgage, research by NAB Broker and Genworth has revealed that more than half of consumers go via the third-party channel.

In light of this research, it’s imperative that you do right by your client and offer up a lender that best suits their needs.

At Pepper, the process of taking out a mortgage is made easy.

The lender’s prime product Pepper Essential is often the first port of call for many first-time owner-occupier applications.

The Pepper Essential product is the most basic out of Pepper’s suite and is available to borrowers with a clean credit history.

Clients can borrow up to 85 per cent of the property’s value (for loans up to $850,000), with flexible repayment options without the need for third-party LMI approval.

A ‘plus’ feature is also included in this product and is available to those borrowers who want an interest-only repayment term.

Pepper’s director of sales and distribution Mario Rehayem says Pepper Essential comes as the lender looks to tick all of the boxes for its broker partners and their customers.

“We started off in the business as a non-conforming lender, a specialist lender, and we have merged into prime,” he says.

“The main reason being that our brokers and customers alike were constantly urging us to get into prime because they embrace our service and they understand and love the way we are flexible in our credit and the way we are able to cater for those clients.

“[The prime product] is for your run-of-the-mill standard vanilla loans with an edge. That edge is our product has no affiliation to any mortgage insurer [and] it has no credit scoring. This allows flexibility for that broker to be able to go in and say to the client ‘this is exactly what the product is; there is no algorithm that is going to determine the outcome of this bill’.”

The next big thing

Just like with a slice of pie, many people don’t want to stop at just one property purchase. A lot will inevitably choose to take out a second mortgage for an investment property at some stage in their life.

So how can Pepper help you retain a customer in this type of situation?

In most cases, clients who want to buy an investment property will qualify for either a prime or near-prime loan at Pepper.

The lender’s near-prime product Pepper Easy was created for clients who have just missed out on a prime home loan, generally because of credit impairment or default issues in the past.

Like the prime product, Pepper Easy does not require LMI approval.

Regardless of whether you submit your investor client under a prime or near-prime application, Pepper will come back with an option that is best suited.

Mr Rehayem added that this “cascading model” will become automatic later this year, allowing even faster turnaround times.

“If that product is not being selected correctly and it’s gone in and submitted as prime, in the normal case with a bank that deal would have been rejected,” Mr Rehayem explains.

“When that deal has been declined then that broker would need to sit back, re-evaluate the customer’s situation and then contact the customer and do another KYC [Know Your Customer] in the sense of re-offering what product they believe is next suitable.

“With Pepper, if that product has come in as prime, we will use the same application [and] the same assessment will then cascade the application to another product that best suits that customer at hand.

“Then we will revert back to the broker and say ‘this deal is now being moved from prime to near-prime and these are the reasons why’. Then a broker can go back to the customer and then reconnect with the sense of what the product is about – its features, rates, fees and so forth.”

Mr Rehayem says this creates a better journey for the customer because although they might not be eligible for a prime product, they qualify for a product that will still allow them to do what they want to do.

Overcoming a set back

There are a number of Australian borrowers who get rejected by the banks.

Their credit scoring doesn’t quite match up, they are unable to meet the banks’ restrictive lending criteria or they can’t provide the income documentation required by traditional lenders.

But a lot of the time borrowers are let down by the banks after they have an unexpected situation play out in their personal life. This could be an illness, a marital separation or a death in the family – anything that prevents the borrower from making the repayments they originally could.

Pepper succeeds where a lot of banks do not by having a backup for borrowers when things go wrong.

This is known as their Pepper Advantage product.

This specialist product is designed to meet the unique needs of borrowers who for whatever reason are unable to meet the banks’ standards and ultimately require a solution outside the box.

Whether your client needs to consolidate their debts, or obtain cash out for personal or business purposes, the Pepper Advantage product might be your best bet.

The product requires no genuine savings, no third-party LMI approval and provides unlimited cash out of up to an LVR of 85 per cent for acceptable purposes including renovations, business use and payout of ATO debts.

According to Pepper, one in four people will require a specialist solution at some point – so for brokers to have a client for life, they’ll likely need to be across this type of loan.

“What I want to stress to a lot of brokers is that sometimes they don’t realise when they are interviewing a customer or going through a lead that they’ve received, they automatically credit score the customer, without really giving them a fair chance,” Mr Rehayem says.

“They are knocking these customers on the head nice and quick, which is a great skill set to have [but] only if you are across most of the products that are available to you.

“All we’re saying is: are you actually incorporating a specialist lender like Pepper in that assessment?”

Mr Rehayem adds that Pepper can help you retain your client for life even in the stickiest of situations.


Pepper has three products up for grabs – here’s how each can provide a solution for your client:

Pepper Essential

This prime product is available in full-doc and alt-doc. It’s a basic home loan with a competitive variable interest rate and is available to borrowers with a clean credit history.

The Essential product offers flexible repayment options without the need for third-party lender’s mortgage insurance (LMI) approval. It is also available to self-employed borrowers who need to provide alternative income documentation outside of the standard two-year tax returns (alt-doc loan).

Pepper Easy

This near-prime product is available in full-doc and alt-doc and was created to meet the changing needs of Australian borrowers provided they have not had any defaults or credit impairment in the past 24 months.

Pepper Easy allows for the consolidation of an unlimited amount of debts, as well as unlimited defaults of less than $1,000.

Other features include: discharge from bankruptcy (one day accepted); and cash out for loans with an LVR of up to 85 per cent.

Pepper Advantage

This specialist product is available in full-doc and alt-doc. It is designed for customers who are unable to meet the lending criteria of banks and mortgage insurers, due to restrictive credit criteria.

The alt-doc version of this product is designed to meet the needs of self-employed borrowers or small business owners who are unable to provide the income documentation required by traditional lenders and mortgage insurers.

CASE STUDY: Melissa Gielnik, director, Smart Lending

“There were some everyday people who had good jobs, they had been in the country for eight years and they were British.

We placed them with their first loan and they had a car loan and a credit card, which they wanted to consolidate.

They were in their early 40s and their credit score declined with everyone, but not for any obvious or apparent reason.

We were able to place them with a specialist lender at the same rate as a normal bank and they were happy.

They weren’t looking for a short-term solution. They were looking for a good loan where they could pay off extra and we were able to help them do that.

We were able to place them with Pepper Home Loans at a rate equivalent to a major lender because the specialist lenders don’t credit score. There are lots of different niches that they do that are really beneficial to the everyday client. The major lenders have very defined boxes.”

CASE STUDY: Simon Orbell, co-founder/director of mortgage advice, Smartmove

“I had a self-funded, 65-year-old retiree and so none of the banks wanted to touch the application because of age, the restrictions around age and that type of thing.

But Pepper took a commercial approach to it and was able to provide a solution.

There would have been more than five or six more lenders that we’d approached from a credit perspective. We’d gone to them with an email or a conversation around that and they weren’t happy to even consider it or have an application go in.

Pepper just stood out and they workshopped it with us.

They helped us with the customer in terms of going through the application process, getting it through credit and it ended up being as smooth as silk.

That client was just looking to basically extract funds to be able to purchase an investment property and they were asset rich and cash poor and they just didn’t have the option to do so with any other provider.

Purchasing an investment property was the initial goal and they were able to do that.”

CASE STUDY: Katrina Rowlands, principal, Mortgage Success

“I had a very long-term client whose wife was unfortunately diagnosed with a brain virus.

It was undiagnosed for some time and gave the impression of just being a lack of energy and really tested her for some months.

During that time, she did lose her job. They didn’t want to lose the house.

They did get in arrears of all the bills and it took some time when we tried to get them some assistance.

Then her illness was diagnosed, but they were able to correct it. She had one operation and it was a relatively quick fix but they were many months behind in their home loan and they had credit cards that were dramatically behind.

I was able to approach Pepper, give them the situation and they had no problem with refinancing it, consolidating the debt for the clients and they started back on, even keeled, straight after she was fully well.

For me that was an ultimate solution for those clients. The deal that we got them was beautifully priced because of the consideration that was taken for the client’s matter.

I don’t know of anyone else that could’ve done the deal as well, in this situation, as Pepper did."

The life cycle of a client
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