Non-bank lenders

Discussion in 'Loans & Mortgage Brokers' started by UrbanDingo, 15th Jan, 2018.

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  1. Peppas

    Peppas Well-Known Member

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    Hi @euro73, I assume firstmac is resimac? If its a redraw offset, would it drop your principal loan amount owed? Also, does this make it difficult if you want to withdraw cash out of the offset account at a later date? All arbitrary now, I'll find out eventually :(
     
    Peppas, 1st Feb, 2018
    #61
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    No more than Toyota be Kia

    Both asian made cars, but different

    ta

    rolf
     
    Rolf Latham, 1st Feb, 2018
    #62
  3. Peppas

    Peppas Well-Known Member

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    Ah, sorry, my bad!
     
    Peppas, 1st Feb, 2018
    #63
  4. euro73

    euro73 Well-Known Member Business Member

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    No. Two completely different lenders :)
     
    euro73, 2nd Feb, 2018
    #64
  5. Peppas

    Peppas Well-Known Member

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    So Resimac offset is a normal offset right? :)
     
    Peppas, 2nd Feb, 2018
    #65
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Are they an authorised deposit taking institution?
     
    Terry_w, 2nd Feb, 2018
    #66
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    No

    Its a "redraw offset"

    Your money becomes their money.

    Dual account like FM, so likely fine for tax reasons, not so for gov guarantee that they provide to ADIs.

    Its a low cost product, has good serviceability, and is fine for a loan where there isnt much in the redraw.

    Clients do have concerns when they us it like a LOC..............

    ta
    rolf
     
    Rolf Latham, 2nd Feb, 2018
    #67
  8. Peppas

    Peppas Well-Known Member

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    OK thanks @Rolf Latham and @Terry_w I guess I should have researched the lenders more rather than just taking the advice of a broker recommended to me. On reading this thread it's just made me a bit wary about dropping in a large sum of cash into the offset account - should I be wary about issues related to this later on if I want to withdraw? The main reason I ended up OK'ing the product was that it had an offset...
     
    Peppas, 2nd Feb, 2018
    #68
  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    There may only be redraw concerns where the funder runs into issues, or the market goes awry.

    Read the conditions for the redraw in the T&Cs Id suggest.

    To be fair to the broker, the chance of this with major non banks like Resi and FM is very slim.........but it does need to be explained to the borrower in my view, for if it does occur it may cause much hardship.

    ta
    rolf
     
    Rolf Latham, 2nd Feb, 2018
    #69
  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    be very wary. Do your research.
     
    Terry_w, 2nd Feb, 2018
    #70
  11. euro73

    euro73 Well-Known Member Business Member

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    These brands have been around for decades... they survived the GFC unscathed where other non banks didnt, which tells me their business models are very sound. They both operate books with lower levels of arrears and delinquency than any ADI in the country.

    Basically, unless there is a GFC type event and they fail, you have nothing to be concerned about. Given there has already been a GFC and they did not fail, I would argue they have already disproven that particular risk ...
     
    euro73, 2nd Feb, 2018
    #71
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  12. Peppas

    Peppas Well-Known Member

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    Thanks heaps for that feedback @euro73
     
    Peppas, 3rd Feb, 2018
    #72
  13. Frank M

    Frank M Well-Known Member

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    where would firstmac sit out of the three, and which order would you take? cheers
     
    Frank M, 19th Jun, 2018
    #73
  14. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    between the mainstreams but below pepper and liberty

    ta
    rolf
     
    Rolf Latham, 19th Jun, 2018
    #74
  15. Frank M

    Frank M Well-Known Member

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    thanks Rolf
    so would last straw lending after using firstmac be pepper, then liberty being the last option?
     
    Frank M, 19th Jun, 2018
    #75
  16. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    In general thats the progression

    there are some smaller funders in the middle of all that

    ta

    rolf
     
    Rolf Latham, 19th Jun, 2018
    #76
  17. Frank M

    Frank M Well-Known Member

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    Thank you much appreciated
     
    Frank M, 19th Jun, 2018
    #77
  18. Nesta

    Nesta Active Member

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    Can the non-bank lenders such as Pepper be eventually regulated by APRA? Or is their current regulator ASIC going to apply the same regulations to non-banks just as APRA has done?
     
    Nesta, 19th Jun, 2018
    #78
  19. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Udner current provisions, I dont believe that APRA has the power.

    APRA controlled lenders get direct benefits for the APRA "interference" in their business model. One of these is the ADI Fed gov guarantee of 250 k.

    ASIC already has the capacity to shut the door on Pepper and Liberty etc ......but i'd say they too realise that if they get too harsh on the edges of the lending environment, then they will kill the last little green shoots that that the economy still has left.

    Currently, there is a big push from the " we need to protect humanity from themselves brigade" to regulate SME lending to the same levels as personal.

    ta
    rolf
     
    Rolf Latham, 19th Jun, 2018
    #79
  20. Nesta

    Nesta Active Member

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    Thanks Rolf. I was going to purchase a block of land to be settled first quarter of 2019, and my broker advised me that if the block settles in 3 months then no problem, but if it settles in first quarter of 2019 and if Pepper did get regulated to become a normal bank by the settlement time, then it would be a problem..
     
    Nesta, 19th Jun, 2018
    #80
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