Help for customers who big banks consider difficult
Bluestone Home Loans has lowered its serviceability buffer from 2% to 1.5% for loans with up to 70% LVR on its near prime and prime products.
The buffer reduction is designed to appeal to non-standard clients, especially those in the self-employed category, who may find it difficult to meet the serviceability requirements of many lenders.
Bluestone chief commercial officer Tony MacRae (pictured above left) said in reducing the buffer to 1.5%, Bluestone was positioning itself as the lender of choice for brokers with non-standard clients.
“Big banks have long considered these customers too difficult, and both brokers and their clients have suffered as a result” MacRae said.
“Our stated goal is to be the go-to lender for brokers with non-standard clients, and this change in our serviceability buffer is just the latest in our policy changes that work towards that end.
“Brokers work with non-standard customers. We want to be the ‘go-to’ non-standard lender who recognises that.”
MacRae said there had been a notable shift towards clients looking for income diversification, fuelled by economic uncertainties and digital-economy opportunities.
“This trend is growing, with technology and a move towards financial literacy and independence playing key roles,” he said. “Bluestone is closely monitoring these changes to align our services with the evolving needs of brokers and borrowers in the non-standard lending sector."
Bluestone reinforces its commitment to SMSF lending
Bluestone has also underlined its commitment to supporting brokers working with SMSF clients, particularly those looking to purchase property.
Bluestone head of specialised distribution Richard Chesworth (pictured above right) said a key insight in the SMSF sector revealed the growing potential for refinancing.
Chesworth said while recommending property purchases fell under ‘financial advice’, assisting SMSFs with refinancing was considered ‘credit advice’.
“This distinction opens doors for brokers to engage with trustees, accountants, and financial advisers,” he said.
Chesworth said brokers could play a crucial role in guiding SMSF trustees through the refinancing process, leveraging their expertise to provide optimal credit solutions.
He said the major banks’ exit from the SMSF lending space paved the way for non-bank lenders to fill the void and they had effectively catered to the demand for new purchases.
When it came to refinancing to more advantageous solutions, this area remained largely untapped and represented a significant opportunity for SMSF trustees, with the support of their advisors and mortgage brokers, to explore beneficial refinancing avenues.
Bluestone keen to help with SMSF refinancing
“We're seeing savings in excess of 3% when a customer refinances their SMSF loan with Bluestone, which can deliver an annual interest savings in many cases of more than $8,000,” said Chesworth.
“The ideal position to be in within this concessional environment is positively geared, as fund members still have 85% of income post-tax to go towards reducing debt or diversifying investments.”
Chesworth said there were a number of ways Bluestone focused on the SMSF sector, including offering competitive rates and turnaround times, no minimum liquidity requirement and maximising borrowing potential.
In September, Bluestone Home Loans launched a self-managed super fund loan that can be used to buy or refinance residential property.
The product caters for people who already have a SMSF set up and want to acquire a property using a portion of funds built up within the fund.
Bluestone educating brokers in a niche market
Bluestone is also offering ongoing education for brokers in the SMSF field at a time when the company expects continued purchase activity in the SMSF segment over the next six months as well as increased refinance activity as SMSFs complete their annual returns and realise the considerable increase in their interest costs.
“Bluestone provides market-leading education sessions to help brokers understand how SMSFs are structured, the confidence around communicating with customers to ensure they are providing credit advice rather than financial advice, and hands-on support through applications,” Chesworth said.
Earlier this year Bluestone had a brand relaunch with a new tagline: ‘Lending shaped around you’ designed to highlight the non-bank’s approach to fitting the loan to the customer, not the other way around.
The brand update also includes a revamped website.
Do you think borrowers and brokers will welcome Bluestone’s drop in its serviceability buffer? Share your thoughts below
