Happiest clients: Don’t write off a high interest rate

A couple with two existing properties was looking to buy a third house as an investment. They had already signed the contract, but were at risk of missing their payment due date because their existing loan provider couldn’t completely cover what they needed. Their situation was made worse by the tighter lending policies of both major and second-tier banks.  

Melbourne-based Option Finance Australia broker Zhuliang Huang told MPA that policy changes have affected female borrowing capacity in particular, with some existing lenders having extremely high assessment rates. This made it impossible for the couple to borrow as much as they could in years past when they purchased their first two properties.

Although the couple had a clean credit history, their credit traffic may have pulled their credit score down because of their enquiries with existing loan providers and some major banks. According to Huang, the credit system of some lenders tends to auto-filter or decline applications.

To solve the issue, Huang presented the couple’s case to a credit union that assessed their credit history manually. The union’s “reasonable assessment” allowed the couple to borrow enough to have their loan settled.

Being a broker who specialises in mortgages, credit unions and specialist lenders, Huang was “pretty confident” he could get what his client needed. His past deals further boosted his confidence.

“Don’t let high interest rates scare you away, as each lender has a niche that the big banks might not have,” Huang said. “Clients don’t mind paying a bit more on interest rates, if it can meet their goal.”

Huang sets aside time regularly to catch up with the BDMs of smaller lenders and credit unions to remain up-to-date with their policies. He finds these lenders capable of filling gaps that big banks might not be able to address. 

In MPA’s happiest client short story series we showcase stand out ‘client success stories’ from brokers and discover what they learnt along the way. Leaving aside the details of the deal, we explore the human side of the story and how brokers really make an impact in people’s lives. If you have a client story you would like to share please email the editor.