Is Loan Market a good lender?

Discussion in 'Property Finance' started by Pakz, 26th Nov, 2018.

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  1. Pakz

    Pakz New Member

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    Hi Everyone.

    Has any of you had any experience dealing with Loan Market as a lender? Looks like they are subsidiary of NAB. What are the pros and cons of taking a loan with them?
     
  2. Trainee

    Trainee Well-Known Member

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    Why do you want to deal with them?
     
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  3. Terry_w

    Terry_w Mortgage broker licenced 4 tax/legal advice Business Member

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    They are an aggregator and the product word be a rebranded nab product which is available under many different badges. Not the ideal product.
     
  4. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Loan market are a mortgage broker franchise group. Similar to Aussie Home Loans or Mortgage Choice.

    They probably brand their own loan product through the NAB, quite a few broker groups have access to this (myself and several other brokers here) through their own head groups.

    The rates are fairly competitive, but there's a lot of shortcomings. I'm not a fan of white label loan products because the after sales service tends to be a bit average and is very restricted. If rate is your primary concern, there are alternative options that are a bit more flexible.
     
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  5. jazzsidana

    jazzsidana Mortgage Brokers - Investment Savvy Business Member

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    If you can find the right broker, aggregator is kind of irrelevant from customers perspective.

    Good broker will always work in best interest of their customer.

    If you already don't have one, find one and sit down with them to work out your strategy/short term & long term goals. This will help make sure right systems are put in place on day one for long term success..

    Cheers,
     
  6. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    It's prob just a white label, no frills type product. Which isn't a bad thing - providing it's suitable for your circumstances.

    Cheers

    Jamie
     
  7. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Let me describe a recent experience with a client and why I don't like white label products...

    The lender is Advantage, which is owned and funded by the NAB. My aggregator (Choice) has white labelled their products as 'Choice Lend'.

    I have a client that has a loan set up with a previous broker that's now retired. His aggregator was FAST, who has exactly the same white labelled product but under the name 'FAST Lend'.

    We needed to release equity on the property secured by this loan. There's nothing wrong with the existing loan, it just needs an increase. I call my relationship manager at Choice Lend and ask if I can increase the existing loan.

    Despite Fast Lend and Choice Lend being the same product, same funding and effectively the same lender, the different label means I can't do anything with it myself. Only a broker through FAST can do it. Even the FAST Lend help desk wouldn't simply take instructions for a top up from me or the client.

    This creates a conflict of interest. I either hand the client to a competitor (we've been working together for 3 years and have an ongoing investment strategy, so probably not ideal for anyone) or I can refinance the loan which will cost the client money.

    Had the loan been with any regular lender, I could have organised a simple top up and worked with what the client already has. A good outcome for the client, no conflicts of interest in this type of solution.

    Whilst this lender isn't, "Inappropriate", and thus meets the letter of the law, it restricts the clients choices of who they deal with in the future. I can't say that the lender was entirely appropriate to the clients future needs. The minimum standard was met, but I think we should be working to something higher.

    In the end I decided that this is a client I personally like and we've got a good ongoing relationship with. We refinanced the loan to a more appropriate lender with similar rates. I was paid a new commission by that lender and I reimbursed the client's refinance costs from that. The client isn't out of pocket, now has a more appropriate loan and I probably even made more money overall.

    These sorts of branded or white label products can be competitive but there are other mainstream products that are similarly priced. The problem is they they tend to box the borrower in to a particular broker group. The whole point of using a broker is to have access to multiple choices and good advice. Sometimes that also means the choice of broker and this type of product restricts that choice.
     
    Last edited: 27th Nov, 2018
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  8. Terry_w

    Terry_w Mortgage broker licenced 4 tax/legal advice Business Member

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    Good points Peter

    This reminds me of a problem a client of my law firm had years ago. They had sold their property and we needed to discharge the mortgage. The product they used was a white label product and the mortgage manager which badged it had since gone almost out of business. Their telephones and emails etc were simply not being answered, they had left their premises and where at a location unknown and the mortgagee, Adelaide Bank, refused to help saying we had to contact the mortgage manager. Eventually they did respond, but if I had not started the process early the client would have missed settlement.