New low doc loan ‘gives second chance’

by Caroline Dann18 Oct 2012

A non-bank lender’s new low and full doc loan is designed to give borrowers with bad history “a second chance.”  

Homeloans Ltd’s new FlexiChoice product offers 100% offset and unlimited cash out, and is available for refinance. 
In addition, the risk-based pricing model includes a step-down for good payment history.
Greg Mitchell, Homeloans’ general manager sales, told Australian Broker Online the loans would not only “open a massive amount of business” but give borrowers with a chequered past a second chance.
“Without these types of facilities, it is very restrictive. People’s employment changes, people’s jobs change. 
“A prime example is: you’ve had a lot of people who may have gone bankrupt…via their own business. They’ve now gone into full-time employment, and they still have their home,” he said.
“And yet they’re tarnished with that brush if they’ve gone through any defaults or bankruptcy. They’re punished for that for a long period of time.”
“They’re good people that pay their mortgages, have good jobs and now their income is stable. The beauty of these products now is you can sit down, and you can look at the history.”
Mitchell said the broker channel was already responding “positively” to the products.
“The responses we’ve got so far from brokers have been great. As far as enquiries go, we’ve increased our enquiries by more than 30%.”


  • by VIC Broker 18/10/2012 10:34:56 AM

    But what about the interest rates?They surely don't want to see themselves in a similar situations like before.

  • by VIC Borrower 18/10/2012 11:14:31 AM

    Another one of these white label products with another lender arrangement.

  • by Anil 12/01/2013 5:19:14 PM

    Dear Chris, My wife, Heather, and I are trying to get an estitame of how mortgage rates vacillate by using the GI bill. I know we're eligible to borrow a certain amount of money (depending on credit risk) at a certain rate for a certain time. What we'd like to know is a simple generic formula to go by. For example, a $300,000 home w/ no down vrs the same home w/3 % down vrs the same home with 10% down would look HOW on a piece of paper: 0 down = highest monthly payment and the 3% next highest and 10% lowest but dollar figure wise are we talking $400 more a month or more or less from 0 down to 10 down, for example. I imagine there are other factors involved, i.e. mortgage insurance, etc. but we'd appreciate any illumination you could provide us BEFORE we jump into the stream. Thanks, Chris. Ron Wright