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Why use a non-bank lender? The products are better, the communication and top-level access is first-grade and the relationship is built on mutual trust and understanding. Simple
Nathan Daniell, managing director at Simplify Your Mortgage Pty Ltd has written non-bank white-label products just about exclusively for 10 years. And, he says, it’s for good reason too: they have lower interest rates and pay higher commissions.
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But wait, there’s more. The products are better, the communication and top-level access is first-grade and the relationship is built on mutual trust and understanding.
About products, Mr Daniell says, those of his preferred lender – Resimac – have the same features, if not better ones, than any of the big four.
“My clients are never disadvantaged because of a lack of product features if they choose to make the switch.”
What’s more, he says having access to the credit department means non-banks always provide better service than the bank lenders.
“The turnaround times I have experienced with Resimac have never been matched by a bank. Never.”
Blown away
Mortgage brokers, he adds, have to set the client’s expectations from the outset. And the service he gets from Resimac has always allowed him to under-promise and over-deliver.
Not only is he “blown away” by this but his clients are too. “My clients instantly become raving fans of the services I provide, which is why my business quickly became 100 per cent from referrals.”
Mr Daniell’s clients are also never bombarded with the bank’s promotional advertising. “Non-bank lenders do not have a branch network so have to rely on mortgage brokers to introduce new loans.
“The business relationship is all important to the non-bank lender and I have always found they go the extra yard to assist me and my clients,” he says.
Mr Daniell describes his association with Resimac as being a “true business relationship”. Resimac allows him to be a mortgage originator, allowing him to dial up or dial down the interest rate, which plays a big hand in the commission he earns.
“Resimac is my business partner, my equal and the relationship we have is built on respect and understanding, something the big banks will never understand.”
Misconceptions
It is easy to sell a non-bank lender to a client when detailing product and price but you need to be aware of the common misconceptions a client may have, he says, in particular the question: how safe are they?
“You need to find out where the non-bank sources its funds from and who backs its internet banking platform. When you explain these details to your client, you will cover off their concerns,” says Mr Daniell.
About the differences between non-bank lenders and their banking counterparts, Mr Daniell says serviceability is the main one he’s noticed.
“I believe non-banks are more prudent with their lending practices and it wouldn’t surprise me if they have a lower rate of clients going into arrears. I actually prefer this because I know when interest rates rise my clients are going to be in a better position to afford the rate rises without suffering financial hardship.”
About the areas non-banks are best suited to play in, Mr Daniell says the great benefit of using a non-bank lender is if the client is found to have a major discrepancy on their credit file, sometimes unbeknownst to the client, he needn’t take the application to a different lender.
“Resimac has its prime lending and its more flexible specialist lending arm. Although this has only happened once in the past I was able to assist the client secure the loan, then six months later I flick them back to the prime lending product.”
