The key players discuss their thoughts on high fees and guaranteed turnaround times.
The key players discuss their thoughts on high fees and guaranteed turnaround times.
Non-banks are known for relatively high fees – do you believe this is true?
IDEN GROUP:
With exit fees gone, a win for the big banks, a loss for brokers due to clawbacks, it has been harder to compete on fees. We do a formal valuation on every property, not a desktop. It does protect the customer, but it is an additional investment. In addition, as we do not handle cash, we use panel solicitors to convey the transaction, not an in-house solution, which is again a little more. Both we do subsidise a little but with smaller back books, [and] banks are better placed to subsidise new business than we are, [although] we are very close these days anyway. I do not hear of fees being too much an issue these days, particularly with our loyalty cash-back fuel offer.
AUSTRALIAN FIRST MORTGAGE:
No. We charge fees (on some products) like every other lender, and for the fees customers enjoy the benefits of having access to personalised service. Also, bear in mind that some of our products – like the Complete/ Alliance product – do not have any application or valuation fee.
BLUESTONE:
In some cases fees can be higher, but this often is offset by interest rates and loan features which all need to be taken into account when deciding which loan is best suited to the customer’s particular circumstances. Some smaller lenders need to charge upfront fees as they do not have the economies of scale that the larger institutions enjoy. Bluestone operates a rate-for-risk model where we will match a customer to the loan solution that suits their own particular circumstances at the time of application. We assess each and every application on its merits and will offer the customer the best deal we can.
Do you have a guaranteed turnaround time, and if not, why not?
BETTER MORTGAGE MANAGEMENT:
We don’t have a guaranteed turnaround time. We manually assess all applications, which are often complex and require greater analysis, which means a standard turnaround time is difficult to maintain. And there is no point making promises you can’t keep.
PEPPER:
We have openly communicated our service commitment to brokers and the industry, which is: if the deal has been submitted by 12pm, we will underwrite it and advise the broker with an assessed response within the same day. We are very proud to deliver this speed of service to brokers, and we’ve executed it successfully now for over 18 months. It’s a big hit with the brokers, and the feedback has been very positive.
LIBERTY:
We offer leading turnaround times for residential loans within 24 hours, and for our prime motor applications it’s in a few hours.
AUSTRALIAN FIRST MORTGAGE:
No. Because our priority is to focus on competitiveness, and managing our turnaround times is part and parcel of this. In order to remain competitive, and because efficiency is the backbone of the non-bank industry, we have a 24–48-hour turnaround time on almost all of our applications. In some cases there are extenuating circumstances and delays will occur. In these cases we always keep the broker in the loop, to manage their customer’s expectations.
Related articles:
Non banks ultimate round-up: Part 1
Non-banks are known for relatively high fees – do you believe this is true?
IDEN GROUP:
With exit fees gone, a win for the big banks, a loss for brokers due to clawbacks, it has been harder to compete on fees. We do a formal valuation on every property, not a desktop. It does protect the customer, but it is an additional investment. In addition, as we do not handle cash, we use panel solicitors to convey the transaction, not an in-house solution, which is again a little more. Both we do subsidise a little but with smaller back books, [and] banks are better placed to subsidise new business than we are, [although] we are very close these days anyway. I do not hear of fees being too much an issue these days, particularly with our loyalty cash-back fuel offer.
AUSTRALIAN FIRST MORTGAGE:
No. We charge fees (on some products) like every other lender, and for the fees customers enjoy the benefits of having access to personalised service. Also, bear in mind that some of our products – like the Complete/ Alliance product – do not have any application or valuation fee.
BLUESTONE:
In some cases fees can be higher, but this often is offset by interest rates and loan features which all need to be taken into account when deciding which loan is best suited to the customer’s particular circumstances. Some smaller lenders need to charge upfront fees as they do not have the economies of scale that the larger institutions enjoy. Bluestone operates a rate-for-risk model where we will match a customer to the loan solution that suits their own particular circumstances at the time of application. We assess each and every application on its merits and will offer the customer the best deal we can.
Do you have a guaranteed turnaround time, and if not, why not?
BETTER MORTGAGE MANAGEMENT:
We don’t have a guaranteed turnaround time. We manually assess all applications, which are often complex and require greater analysis, which means a standard turnaround time is difficult to maintain. And there is no point making promises you can’t keep.
PEPPER:
We have openly communicated our service commitment to brokers and the industry, which is: if the deal has been submitted by 12pm, we will underwrite it and advise the broker with an assessed response within the same day. We are very proud to deliver this speed of service to brokers, and we’ve executed it successfully now for over 18 months. It’s a big hit with the brokers, and the feedback has been very positive.
LIBERTY:
We offer leading turnaround times for residential loans within 24 hours, and for our prime motor applications it’s in a few hours.
AUSTRALIAN FIRST MORTGAGE:
No. Because our priority is to focus on competitiveness, and managing our turnaround times is part and parcel of this. In order to remain competitive, and because efficiency is the backbone of the non-bank industry, we have a 24–48-hour turnaround time on almost all of our applications. In some cases there are extenuating circumstances and delays will occur. In these cases we always keep the broker in the loop, to manage their customer’s expectations.
Related articles:
Non banks ultimate round-up: Part 1
