One lender has announced plans to double its mortgage business after reporting a big increase in broker-referred loans.
HomeStart Finance said its third-party volumes had increased by 55 per cent in the past two years.
South Australia’s government-backed lender also said brokers' referrals would represent 25 per cent of new lending in 2013/2014 – and that it wanted this figure to reach 50 per cent by 2016.
Chief executive John Oliver said HomeStart had focused on the third-party channel in the past few years because it was a good strategic fit with its distribution model.
“Brokers provide us with a cost-effective channel to broaden our geographical footprint, and we have invested in this channel to ensure we are a strong partner,” he said.
Mr Oliver said the big increase in HomeStart’s third-party volumes showed that there was a market for brokers who offered the lender’s “innovative” products.
“We have a unique position in the market in that we … recognise government payments as a form of income and offer a higher loan-to-value ratio than most other lenders,” he said.
“This provides brokers with a strong alternative solution for customers who are struggling to meet the financial requirements of mainstream lenders, but don’t want to give up on their home ownership dream.”
[Related: HomeStart tastes success with Centrelink clients]
