Mortgage manager Better Mortgage Management has taken the wraps off a new low-doc product that it says will put an end to broker 'frustration' over self-employed low-doc to low-doc refinances.
The new 'Flexi Access'-branded loan will offer self-employed borrowers cash out up to 80% LVR, which can then be used for any worthwhile business purpose or the payout of ATO debt.
BMM's managing director Murray Cowan told Australian BrokerNews the launch came in response to mortgage broker frustration with major bank low-doc offerings.
"It’s been a difficult last 12 months for many small businesses and the last thing they need is to have difficulty refinancing their mortgage, but the reality is the major banks have moved away from this market, particularly at LVRs greater than 60%” Cowan said.
Better Mortgage Management funds low-docs via lenders Adelaide Bank, Resimac, Advantedge and Pepper. Cowan said the Flexi Access combines a mix of funding from these lenders, in order to package the most flexible cash out options of each funder and sell it to the broker market.
Cowan said the product is a new offering to the market, and not a resurrection of something available to brokers prior to the onset of the financial crisis. "Cash out on low-doc has always been available, but we are trying to offer it at higher LVRs at a better rate and with more options in regards to what income verification the client supplies," Cowan explained.
Despite ASIC increasingly vigilant of low-doc brokers, Cowan said that he is not concerned about the risks of the products, which can be mitigated by treating them thoroughly.
"Low docs are not risky under NCCP, provided brokers conduct a thorough assessment of the client's needs and financial position, keep records and ask questions relating to any financial information provided by the client," he said.
"We are comfortable offering these products to the broker market."
The new low-doc will sit alongside BMM's existing low-doc and specialist range, which offers features including vacant land loans, ABN from 6 months old and loans in the name of companies and trusts. “We will continue to do everything possible to assist the self-employed with their finance needs and provide brokers and their clients with a genuine alternative to the majors,” Cowan said.