South Australian government-backed bank HomeStart Finance has grown its third party channel by 174 over the 2016-17 financial year, bringing the total number to 520 accredited brokers.
During this time, 720 new loans worth $197m were settled through brokers with HomeStart, representing more than 43% of new lending. This was an increase of 38% from the previous financial year.
HomeStart has been working hard to reach out to brokers and spread awareness of the lender’s unique products, head of retail Deborah Dickson told Australian Broker
Brokers can use the lender as a “stepping stone” for their clients, allowing them to get into home ownership, she said. This means borrowers can take up a HomeStart loan to first enter the market and move to a major lender in three or four years’ time once they have built up some equity in the property.
“We have a number of unique features in our product. We don’t charge LMI. We do charge a small loan provision charge as part of our upfront costs but there’s no LMI.”
This unique structure is particularly attractive to first home buyers, Dickson said.
“Because the banks have tightened up in their lending policies, we’re finding that we’re getting more and more first home buyers coming to us. I think that’s a really attractive thing for brokers to have us on their panel.”
HomeStart has expanded its broker support with three BDMs now operating across the state in metro and regional areas.
“We’re going out and we’re seeing a lot more people in the industry – a lot more brokers – and we’re finding that a lot of brokers in South Australia are new-to-industry.”
As such, the lender has devoted time to explain to brokers the difference between HomeStart’s own product and those in general lending, Dickson said.
The lender also features on most major aggregator panels including Connective
, PLAN Australia
, Choice Aggregation Services and AFG.
During the past year, improvements have also been made in HomeStart’s systems, back channel communications, its quality assurance team, and its assessors.
“Because of the increase in volume but also the feedback we received that we needed to be more responsive, we’ve increased numbers right across the board,” Dickson said.
In future, the lender also has eyes on creating a more robust accreditation process and further becoming more responsive to broker needs.
HomeStart’s product is available for those buying property in South Australia and comes with lower upfront costs and no fixed loan term. Repayments are based on what the individual borrower can afford with borrowers indexed each year depending on CPI.
“What that means is we address the issue of customers being able to save a massive deposit and we also keep the repayments well within reach for the average family.”
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