InterPrac Mortgages Newsletter-Nov 2004

Welcome to your InterPrac Mortgage Service update.

This email is created to inform you of the Best Rates in the lending market and of incidental and significant changes in the lending environment.

Commercial Finance

We have recently employed the services of a professional Commercial Finance broker. He has had over 25 years industry experience. Our Commercial broker specialises in:

• Commercial / Business Finance

• Property Finance – Development & Investment

• Rural Finance

• Retail Finance - Home & Investment

• Franchise Finance

• Joint Venture Funding

• Mezzanine Finance

• Credit Impaired Loans

Commercial Interest Rates

 

Variable Rate	7.45%
Fixed Rate
One Year	7.26%
Two Years	7.37%
Three Years	7.48%
Four Years	7.53%
Five Years	7.68%

Special Offer

Disclaimer: Information provided is indicative only and can be changed at any time by the lender. While care has been taken to prepare this information there is always a possibility of errors in the information provided. All information should be verified before you enter into a loan contract.

Low doc loans look like they are here to stay

Low doc loans look like they are here to stay. And there’s a good reason for that – customer demand. The uptake on low doc loans has come from a number of groups, but perhaps, most aggressively from the self-employed. In one example a business owner may know they are doing well, but has been remiss in having financials completed before a property purchase. Funds for a deposit and the capacity to repay a loan are not the issues - only proving the income. Low doc loans allow the borrower to state their income using a borrowers’ income declaration form, negating the need for financials. The onus is upon the borrower to represent their income truthfully without the usual paperwork to prove their word.

This, however, is one of the central concerns amidst the growth in popularity of the low doc loan.  The potential for abuse and concern for the customer inflating their income and becoming overcommitted is an issue that extends far beyond the customer themselves. The misrepresentation of income can, in turn, reflect negatively on the broker. If misrepresentation is proved, the loan can be set aside by a court and mortgage insurance can then be denied to the lender. Everyone suffers.

Despite these concerns, the growth in popularity of the low doc loan has been increasing over the last four-or-so years and the products themselves are being refined. The low doc has not yet experienced the full credit cycle, raising fears in some quarters of higher delinquency rates, if the economy experiences a downtown. But the story to date is, so-far-so-good. And, perhaps, that is what should be expected. The low doc loan is sometimes confused with non-conforming lending, but the two usually attract different clientele. Non-conforming borrowers are often credit impaired while the majority of low doc borrowers have a ‘clean-slate’ and show capacity to repay responsibly. So there’s good reason for a positive view of the low doc loan as well as the low doc borrower. Only time will tell if current concerns are realized but, for now, the low doc loan looks likely to stay.

To refer Mortgage Business contact

InterPrac Melbourne office                     

Melbourne 3004

Enovasys software support                    

1300 667 961 (Phone)

1300 667 965 (Fax)

InterPrac Ltd