Low doc loans – “they may not be as hard as you think”

BDM says brokers shouldn't turn away clients with credit defaults

Low doc loans – “they may not be as hard as you think”

Non-vanilla clients have a place in the heart of Renae Long (pictured). The Queensland BDM for MKM Capital told MPA that brokers should see them as new opportunities rather than simply turn them away.

“Not everyone fits the perfect mould of a home borrower or investor,” she said. “Some people have just started up a business, they may not have completed tax returns, have just started a new job or may have some credit hiccups.

“Clients can be extremely satisfied and become the best referral pathway that your broking business has ever had if you take the time to listen to what they need and know how you can assist them.”

Prospective clients with defaults or poor credit scores don’t automatically translate to a loan application being too hard, she said, adding that both credit clean and credit impaired clients can purchase land, build a house or refinance.

“You just need to be bold and discover how easy it can be,” she said. “Low doc loans can be the solution for home or investment purchases, refinances, debt consolidation or just wanting a low doc construction loan.”

She said there was a common misconception in the community around low doc loans, with some people believing non-bank lenders were untrustworthy or charged a premium while only helping people with poor credit. But in contrast, many non-banks offer cheaper rates and settlement fees as well as quicker SLAs than a lot of traditional lenders, she said.

Read more: A home for overlooked borrowers

“I know once brokers submit loans through MKM and settle on the loan, the clients and the brokers are extremely happy,” she said.

She offered the following tips for brokers looking for the right solutions.

“Be brave and don’t give up on anyone. Talk to your BDM, your aggregators, mentors and the FBAA or MFAA. By making time for ongoing development and training, this ensures your knowledge base grows and any trepidation that you previously experienced will be gone or diminished,” she said. “Workshop client scenarios and be that broker that works for the client and not any one particular bank. This will allow you to grow your business and help so many more people.”

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