A non-bank lender has enhanced its proposition in the specialist lending sector after slashing the fees on its alt doc loans.
Yesterday, Better Mortgage Management (BMM) substantially reduced the risk fee on its Capital Specialist Alt Doc Gold (lo doc) loan.
Effective immediately but for a limited time only, the risk fee will be reduced to just 0.5 per cent, making it the cheapest risk fee or mortgage insurance premium in the market for clear credit alt doc loans greater than 60 per cent LVR.
BMM managing director Murray Cowan said the reduction in risk fees would save borrowers thousands of dollars and remove a potential barrier to writing an application.
“Risk fees or mortgage insurance (where available) on comparable loans is 1.5 per cent to 2.5 per cent of the loan amount, so when we reduce the risk fee to this extent it substantially improves the affordability of the loan,” Mr Cowan said.
“For instance, on a loan of $500,000 with the previous risk fee of 1.8 per cent, the saving will be $6,500 with the new fee of $2,500 compared to $9,000 previously.”
With the offer set to end on September 30, Mr Cowan said now was a great time for brokers to revisit their database of self-employed clients to see who might benefit from the fee reduction.
Borrowers looking to get cash out for business purposes, to pay off tax office debt, to consolidate debt, make purchases or with a less than two-year ABN term are among those suited to this loan, Mr Cowan said
“Alt doc lending is different from years gone by and brokers do have to do more legwork, but it is a legitimate form of lending and brokers wouldn’t be providing a full service to their clients if they didn’t consider all options.”