Better Mortgage Management has reduced the risk fee on its Capital Specialist Alt Doc Gold (Lo Doc) loan to just 0.5%, which the group believes to be the cheapest risk fee or mortgage insurance premium in the market for clear credit alt doc loans greater than 60% LVR.
Coupled with a rate of 6.99% at 80% LVR, BMM managing director, Murray Cowan, says accessing finance with unlimited cash out has become ‘much more affordable’ for self-employed borrowers in recent months amid an increase in alt doc lending.
Cowan believes the reduction in risk fees will be welcomed by brokers, as it will potentially save borrowers thousands of dollars and remove a potential barrier to writing the application.
“Risk fees or mortgage insurance (where available) on comparable loans is 1.5% to 2.5% of the loan amount, so when we reduce the risk fee to this extent it substantially improves the affordability of the loan” says Cowan.
“For instance, on a loan of $500,000 with the previous risk fee of 1.8%, the saving will be $6500 with the new fee of $2500 compared to $9000 previously.”
With the low risk fee only in place for a limited time, Cowan says it’s an ‘opportune’ time for brokers to review their databases for self-employed borrowers who will benefit before the offer ends on September 30.
“Alt Doc lending is different to 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.”