Non APRA lenders

Which lenders in Australia DO NOT have to follow APRA serviceability rating requirements (eg. don't calculate your loan based on 7.5%).

We are in a situation where St George wouldn't lend on our last property purchase (even though our negative gearing is only around $10k per annum and last year we paid down our loans at approx. $10k per month off the principal) - we ended up working with a great broker who was able to set us up at Westpac.

The main reason for the difference is that our PPOR here in the USA is a 30 year fixed at 3.5% (27 years left) and yet Aussie banks are insisting that APRA rules require them to calculate that debt at 7.5% (eg a full 100% higher than it ever will be).

So the question I have is are there other lenders that don't need to follow the APRA guidelines eg does Peppers Group or Latrobe etc with their hard money loans fall outside of APRA guidelines?

 

Liberty financial is under ASIC. Theyve been hoovering up loan applications that dont meet the big 4 serviceability criteria.

 

A lot of them won't like foreign income (the non banks).

May also be able to give CBA a crack as they'd view that mortgage at 3.5% * 1.20 @ P&I, which is stronger than 7.5% P&I. Decent for expats too.

 

Thanks for the tip about CBA.

Why do they get to measure our PPOR loan at 1.2 times loading instead of 7.5% APRA?

For that matter......why does APRA require the big 4 banks to calculate serviceability at 7.5% BUT Latrobe/Pepper Group/Liberty etc don't need to follow these guidelines?

Zoolander mentioned Liberty comes under ASIC and not APRA (can anyone explain why etc?)

TIA,
Dean

 

The non banks usually aren't deposit taking institutions who APRA have mandate over.

ASIC have mandate over responsible lending legislation though, so their assessment verification, etc are captured under ASIC.

 

Any non bank lender who would accept foreign income.

 

Out of all the non apra lenders, which one would be best to go with in this current lending environment? Would Pepper be the better lender, having it the last avenue in furthering a property portfolio

 

Much more info needed to advise who is 'better' - servicing is probably the factor so 'better' may be the one that will actually lend.

 

Foreign income lending has become quite difficult, I've recently had mainstream lenders tell me that a file looks really strong, only to then go through weeks of hell trying to get the loan approved. Loans that would have been easy a couple of years ago are impossible today.

Some of the non-banks are open too it, outright stating they're open for business. How this translates to an individuals circumstances can still be tricky however.

By what criteria do you define, "Better"? You need to get advice specific to your circumstances.

 

What are the non banks, eg liberty??

 

Probably more geared to competitive rates among the lenders

 

Liberty, Latrobe, Pepper... anyone have any experiences with non apra lenders lately

 

After the whole Home Capital Group drama going on in Canada right now (their largest non-bank lender recently went bust without warning) I'm feeling a bit sceptical of these sorts of lenders.

 

Believe there was a proposal that non bank lenders will come under APRA scrutiny though in the future? Any updates on that?

 

Changes budget tome may mean they will all be forced into line.....although it seems to be cooling to me so it may not come to light

 

What is your concern? If a lender goes bust their assets, the mortgages, are simply transferred to another lender. Investors, who have lent them money, might be in a little strife.

 

Indeed - there was initially rumblings of their funding sources (in terms of warehousing) to be scrutinised to try give APRA defacto powers over them, but since then it's been put out the government will be looking to extend APRA's powers over to non-bank lenders.

No one will be safe - get what you need to get done now!