Most lenient lender

Rams is the only one of those that don’t use the broker channel. Their franchisees actively market to brokers for referrals.
Rams aren’t outside of APRA they are wholly owned by westpac. Their only niche in terms of capacity is low doc loans, for self employed clients only. Mortgage house is a mortgage manager, rebadging other funders money but using the same policies as their funders to assess income etc.

 

Correct RAMS uses Westpac funds...but they are still using actuals for repayments.

As for Mortgage house you are correct.,...they too have funders which use actuals for repayments.

In my opinion if you have a large portfolio look outside of the Big 4 for a start......

 

I was working at rams when they stopped using actuals and aligned their policy to Westpac’s, who wholly own them. I remember because I was very upset to lose that niche. Let’s agree to disagree.

 

There is no, "Most lenient" lender...

Some of the Big 4 banks have specific niches that might give them borrowing power than others. This really depends on the circumstances of the individual borrower.

The second tier lenders tend to be less generous on borrowing power, but some have much better rates than the Big 4 banks. This can depend on what your needs are, but if you're looking for more money, it's probably not going to help.

Third tier lenders and private funders as Sash suggests often do have more generous policies which may give you more borrowing power, but again it doesn't work for everyone. I've seen plenty of individual examples where the borrowing power was not that much better than a mainstream lender, but the cost is significantly higher.

There's also the risk associated with third tier lenders. For example Liberty's rates have consistently increased over the last few years. What was an acceptable deal a few years ago is now very expensive and there's no opportunity to refinance or seek a better deal due to a lack of alternatives. I'm finding that people don't really appreciate the risks of a third tier lender until a year or more after they've already committed to them.

For my own strategy I've decided that I'm not using these types of lenders myself, rather I'm making other decisions. In some ways this is restrictive to what I can personally do, but it's also more manageable and less risky for me.

 

That is interesting..they planned to do...but have no done this yet.

If they do.....then the Franchises are going to go under.....

 

I can attest to this, and I'm glad I was able to refi to one of the majors before serviceability calcs really tightened up.

 

Yes that is true...thus the need for an exit strategy....I suspect brokers reluctant to take these on because the client will also get out with 18 months.

I for one...like these as they open a few options on getting in and out......

 

It’s been policy for quite some time. Like 4 years. At first they added 20% to actuals but they are defiantly under APRAs scope. So when APRA ‘recommended’ lenders use at least 7% in their assessment they are definitely a part of that group.
I recently bumped into one of my old colleagues at an aggregator event. The word is franchisees are actively using other lenders as the rams assessment team was subsumed by Westpac’s Adelaide credit team and in the same queue (which was massive at the time).

It’s interesting times.

 

Yep...I will give you dhat...but you get my drift....

Look these lenders cannot afford to use actuals otherwise why would anyone go to them.

For example...RAMS is about to change policy from actual to new servicing based on 7.25% in line with We-suck..lot of franchisees are not happy....

So that begs the question around the value proposition.....

 

RAMS have not changed policy yet...but We-suck is implementing their policies what is the bet this is going to wipe out some of the franchises.....lending is already down 20% because of tightening on some of the low docs and duplexes....interesting times indeed....

 

I don't know about that...but I know they were doin' heaps with investors and construction loans...but recently it started dropping off....like the others....

One has to ask...how much is retail lending down...are we about to hit a credit crunch...it will affect Sydney and Melbourne the most.....

 

If rams were still using actuals many of the brokers here would be using them. For franchisees this is a part of their business, going out and getting referrals from brokers. If rams were using actuals we’d know. They use a sensitised rate and have done for at least the last 3 or 4 years.

 

I 5hought it was

Wu Hu #1

 

If it's growth of the book, can be achieved through stopping business leave the door - which suggest would be a bit more common in the broker channel.

 

It hasn't been true actuals for some time. Like the old Westpac calc they would add a monthly % buffer based on the loan limit and use a minumum rate of 4.00% or whatever on the rate so in effect they were servicing at 7.25% or more but they weren't distinguishing between IO or P&I so was very generous to investors with lots of existing IO.

 

Any of the brokers here use RESI?