Pepper Money business development manager, Lauren Midgley, says there are more first home buyers who don’t know where they fit in the market and how much they can borrow leaning on mortgage advisers for expertise.
“Part of our job is to educate these buyers so they are not relying on the banks.”
She says if a buyer has an impairment it doesn’t mean they can’t buy a house. “Advisers need to look at the wider options out there for clients. There are a lot of different things that non-banks offer to get these people into homes.”
Midgley says she likes to discuss scenarios, particularly if they are tricky. She recently met an adviser who had put in a mortgage application to a bank for a young couple who had found and fallen in love with their first home. They had a $13,000 credit card default, so the bank declined their application straight away.
“The young couple’s adviser sent me the bank application and asked if Pepper could do anything? Their application fitted into our niche of near prime lending. He went to the clients that night, outlined what Pepper could do and the next day he had conditional approval. They got to keep the home they'd found and also learned a lesson as well, given their age, on what to disclose to their advisers. These things happen and that's why non-banks are here.”
She says if banks do decline mortgage applications because of clients’ conduct issues, those applications can often be near prime lending for non-banks. “I take bank declines personally, because if applications had been workshopped with us, it's just a more robust way to get them into credit. It does work for non-banks as well as banks.”
Refinancing is another sticky area, says Midgley. “They are important in the market as they go both ways.” She says the company is seeing many people struggling with building a house, running into difficulties and their bank saying it can’t finance them anymore.
“They’ve come to us and laid it out on the table and we can work with them to tidy the situation up. Often it means debt consolidation.” The most she has ever seen is 27 debt consolidations on a refinance.
Because advisers have gone to Pepper Money for refinances, Midgley says she has saved people’s houses. “It feels cool when you are able to help a client the bank is saying no more to.”
In one example, she says, a recent client whose mother owned the house she lived in got into difficulties. “We took the house from the bank, restructured the loan, put the mortgage on a fixed rate so the client knew what her mortgage payments would be over the next three years and saved the property for both of them. That was satisfying.”
