As we prepare for the possibility that the coronavirus pandemic may continue for longer than first anticipated, it’s become essential that home loan customers are offered more flexible options.
With many banks and lenders adjusting their application assessment methods, home loan borrowers may be finding it difficult to source the right finance, even if their circumstances remain unchanged.
As a result, specialist home loan products such as LJ Hooker Home Loans Access are seeing an uptick in the number of customers opting for these types of loans.
Specialist home loans can suit borrowers who have irregular types of income such as self-employed people or those receiving benefits. Specialist home loans can also assist borrowers who have had past or current credit history issues.
Who is a specialist home loan customer?
“Specialist home loans provide me with a real opportunity to help people in very meaningful ways.” explains Jason Ganter, lending specialist with LJ Hooker Home Loans Sunshine Coast. “Especially during the COVID pandemic they allow me to offer flexible solutions and support people who may have a temporary downturn in their self-employed income.”
“I speak with a lot of people who are now finding traditional banks and lenders don’t offer them options that suit the changing times. Ultimately, it’s about helping people buy a home – and sometimes about helping them keep a home.” Mr Ganter went on to say.
Debt consolidation and growth in enquiry from self-employed people are two areas that are driving demand for specialist home loans. A lot of banks and lenders limit the number of debts that can be consolidated, and also don’t offer alternative income verification options for self-employed people.
One key element to how specialist lending products help borrowers is that they don’t use automated credit decisions. Each loan application is assessed on a case by case basis by a real person. This way every applicant’s individual circumstances are taken into consideration. Mr Ganter went on to say, “With increased uncertainty, it is more important than ever for borrowers to have the guidance and support of a trusted lending specialist.”
“With increased uncertainty, it is more important than ever for borrowers to have the guidance and support of a trusted lending specialist.” Jason Ganter, LJ Hooker Home Loans Sunshine Coast.
Why have specialist home loans emerged in recent years?
During the COVID pandemic many impacted employers have retained employees and redeployed some of their workforce into new roles that have become necessary due to a change in their business model. For example, some retailers have shifted their businesses to an online model and redeployed their shop-floor staff into order fulfilment roles.
The agility and flexibility that specialist home loans hold in being able to approach each deal on a case-by-case basis is one of their core strengths and has allowed them to offer greater support to borrowers during the pandemic.
“The biggest single trend in specialist lending, which has been unfolding for two years, has been the persistent tightening of bank acceptance criteria. This has caused much consternation, confusion and uncertainty for many customers, ultimately delaying loan approvals.” Mr Ganter said.
“As an example, with the LJ Hooker Home Loans Access loan I was able to meet a customer, lodge their home loan application, and receive a loan approval within 5 business days. That would just not be possible with a traditional bank or lender.” Ganter went on to say.
“Specialist home loans offer all the features of traditional home loans – off-set facilities, online account access, debit card access, etc. So the convenience factor is still there, and the loan application process is very simple.” Ganter added.
Specialist home loans have become more important during the COVID pandemic
Jeff Chapman, Head or Product and Marketing at LJ Hooker Home Loans said “The coronavirus has become one of history’s most economically disruptive events, and although governments and regulators across the world have acted quickly, and in force, to minimise its economic effects, the residual impacts on individuals, businesses and economies are still evolving and are highly uncertain. What we do know is that the appropriate provision of credit to the broader economy will be key throughout the rebound and recovery phases.
Today’s specialist borrowers were likely to have been bank prime borrowers of the past decade, a time in which banks moved up the loan risk curve. Specialist home loans are best suited to providing credit throughout this period, thanks to the custom nature of the credit assessment methods.”
We know that Australians are incredibly resilient and often just need someone to lend a hand through difficult periods. This is where we anticipate a further increase in demand for specialist home loans.” he says.
“Today’s specialist borrowers were likely to have been bank prime borrowers of the past decade, a time in which banks moved up the loan risk curve.” Jeff Chapman, Head of Product and Marketing, LJ Hooker Home Loans.
How do you find out more about specialist home loans?
Overall, it would appear that customers are becoming increasingly aware of the benefits of specialist home loans, and there is a greater understanding of how a specialist loan can support their varied needs. Those who have been affected [by the pandemic] may be looking for more flexible ways to manage their finances, or for better ways to tackle their existing debt.
The above is why working with a lending specialist is important. For the most part specialist home loans are not available direct to the public. Given this a large number of people may accept a loan decline from their bank, not aware they now have more flexible options.
If you’d like to know more about LJ Hooker Home Loans specialist home loans please fill in your details below and one of our lending specialists will be in touch. Our team are available for a simple phone or web based chat.
Check out our borrower guide for the self-employed
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This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.