All Posts By

Peter Ellis

Why Peter Ellis and Lending Mate are different

Most businesses who assist borrowers with finance sell on price. “We’ll get you the cheapest rate!” they say.

From comparison sites to home loan ads, the primary focus is spruiking super low-interest rates with picture perfect people luring you in. It is almost like the rate is the only consideration – a low rate will solve all your problems and find you the perfect loan.

But when I founded Lending Mate, I decided to focus on something much more important to everyday real people – stress relief.

Not price, but stress relief.

A lot of brokers think that’s crazy. They tell me, “The only thing borrowers care about is rates!”

That’s partly true but mostly false.

Borrowers have been conditioned to focus on price because it is all they see and hear when it comes to home loans. So generally, when I first meet a client, they too are fixated on price.

How does my current rate compare? Have you seen that super low fixed rate – is there a catch? Am I being ripped off by my lender?

However, once I take the time to get to know them, I discover what they’re after is a lot more than someone to find them the cheapest rate. What they are really looking for is someone who will genuinely look after them. Someone who will help them make the right decision to put them in a better place financially. They are looking for someone who is on their side to help them deal with the complicated finance process dominated by big organisations.

Please don’t get me wrong – I’m not saying I ignore interest rates. That would be foolish because obviously, rates are important. It’s just that they’re not the be all and end all because as I have so often found, juicy interest rates are meaningless if you can’t meet the strict lender criteria to obtain the interest rate.

The lack of transparency in lending causes people stress. Borrowers feel like they are only being told half the story, enough to get by, while what is actually going on behind closed doors is being concealed. Transparency is an essential part of the Lending Mate approach.

Lenders love to draw people in with super low-interest rates that in the fine print are “subject to lending criteria”. What people don’t realise is that only certain borrowers will qualify for those rates or that they come with often-annoying conditions. Yet, nowhere is the full list of who qualifies spelled out for borrowers. It is left for when you apply for you to be told “sorry we can’t help you” which can create a huge amount of stress.

Alarmingly, despite only telling people the bare minimum and hiding behind glossy ads that draw you in, most lending business is still directed towards on a handful of lenders. That’s great but these lenders don’t cater to a lot of peoples needs. We at Lending Mate work with a panel of smaller, reputable lenders that are not only more flexible but also know they need to work much harder to win your business.

Lending Mate’s transparency translates into honesty as well. We won’t stuff you around, won’t make promises we can’t keep, won’t make you jump over unnecessary hurdles, won’t pass you from department to department – and won’t make you tear your hair out in frustration. That’s the beauty of transparency – it’s a big stress-reliever.

The people that we focus on are borrowers who have been messed around by the system. They might have received an unexpected “no” from a lender that they have dealt with all their lives. Their circumstances may have changed and things might have happened to them, and for whatever reason, they are struggling with their financial commitments or struggling to get a home loan, and most of all know they need help.

Our approach is simple. We don’t rush into solution mode. We take the time to build trust, to really understand where they are coming from – unique stuff that has happened to them and what is causing them stress about their finances. That’s when they open up and explain how overwhelmed they feel. That’s when they let you know that while a cheap rate is good, what they most want is for someone to relieve them of their stress.

It is a bit like a counsellor. We ask a lot of questions; do a lot of listening. We really want to understand what individuals are going through, but never judge. It is not about right and wrong and it is definitely not clear cut in black and white.

When we understand the full story, we can then make recommendations. Explaining it in detail with full transparency means that they understand all the stuff that other people and lenders haven’t properly disclosed. They know that while the product I’m recommending might not be the cheapest, it will definitely be the one that suits their unique circumstances – at that point in time.

It’s such a relief to know someone has got your back. To be able to forget about endless paperwork, crippling debts, and bank rejections. The stress can just drain away and confidence and control replace it.

We keep in contact with our borrowers’ post loan settlement and find out how they are and how things have progressed. The really positive thing is painting a way forward – that once their circumstances improve we catch up for a review to see if they can move on to another lender with a more attractive rate and policy conditions. Looking after people for life means that we are not just there for a single transaction – but our role in looking after them develops as they do.

When I first started out, I was a Broker much the same as any other. I dealt with the full range of clients who often preferred the loans offered by big lenders that they had dealt with in the past or who advertise heavily. However, I discovered that the borrowers I most enjoyed working with most were the ones that the big lenders were not that interested in. Those non-vanilla borrowers who had the trickiest situations and were feeling the most anxious.

These were real people with real lives, not just the fairytale mum, dad and 2 kids standing in front of an idyllic house with perfectly manicured lawns. They were stressed. They were coping with major life challenges. They were struggling to come to terms with a relationship breakdown. They were sick of bad stuff in the past holding them back and just wanted to get on with their lives. They were different. They were self-employed. They wanted to live somewhere away from major centres. They were not earning an income dictated by the 9 – 5 regime.

A lot of brokers and banks just want to deal with the fairytale because it is easy. Anyone outside of this is often seen as too hard. They need hand-holding. They need solutions which are outside the norm. It can seem like too much work for too little reward. But that is where Lending Mate is different. We cheer for the underdog. It’s their life and I’m there to make sure they can enjoy it.

Eventually, I created Lending Mate so I could specialise in helping these real people. A cheap rate today won’t be the cheapest tomorrow but stress relief will open up a whole world to people who currently feel trapped. That is what Lending Mate is all about.

Applying for a home loan – what to do if you don’t tick all the boxes.

Have you applied for a home loan lately? If not you might be in for a shock. A lot has changed in the past few years and for people who are upgrading or refinancing to access some equity to renovate or invest, it can come as a surprise. Not only has the amount that the bank will lend you decreased but also the questions you are now asked are a lot more extensive which can feel a bit invasive.

How well will you stack up in the eyes of the banks? Here are the top 10 boxes that banks want to tick when you apply for a home loan.

  1. Do you earn your income in the traditional 9 – 5 way?
  2. Is your loan for the home you live in?
  3. Will you be borrowing less than 80% of the value of the property?
  4. Are you aged 50 years or less?
  5. Have you lived at the same address and had the same job for quite a few years?
  6. Is your property a unit or a standard house on a block, in a metro or a large regional location?
  7. Have you had limited enquiries for credit in the past few years (like credit cards, car loans, personal loans, interest-free facilities etc)?
  8. Have you had perfect repayment history on any facility held with the bank (never been over the limit or overdue on any savings account, credit card or personal loan even if there was a valid reason)?
  9. Have you not suffered any issues like job loss, illness or divorce that has caused you financial difficulties?
  10. Do you have a clear credit history?

If you can tick yes to all of these, you are in demand and are in a strong negotiating position with most lenders. If you threaten to leave your current mortgage facility, they could likely offer you reductions in interest rates in order to retain you.

If you ticked ‘no’ to some, you might find yourself in far less of a negotiating position. You might be shown the door if you threaten to take your business elsewhere or, after negotiating the purchase price of a property, your application may be declined or the bank may be willing to lend you a lot less than what you need.

Turning a no into a yes

Although you can’t do anything about your age or if the property you are looking to finance isn’t in the right location, there are a number of other boxes that you could potentially turn into a “yes” over time.

You could focus on paying more than the minimum and building up your equity, resisting the urge to increase your home loan to go on an overseas holiday, being vigilant about paying bills on time and not losing track of due dates, saving up and using cash instead of applying for credit etc.

The good news is that it is not the end of the road if you are knocked back by your lender. There are alternative options out there, even if it may take you a few more steps to get you to where you really want to be.

Don’t panic: Don’t do anything rash like applying with a multitude of lenders hoping that one will say yes, but plan your next move very carefully. You need to be extra careful because anything you do from here could damage your credit record and provide more reasons for lenders to say no in the future.

Get help: Find someone you can trust that has the knowledge and expertise to find options for you. Ask about their track record – for example, have they found options for lots of borrowers in your situation in the past and what is their track record in helping them to get back on track in the long run? Also, get references. Do they have independent reviews or existing borrowers you can speak to that they have helped?

Knowledge is power. Understand what banks are looking for and ensure that you tick all the boxes before you apply for a home loan. Instead, you can blindly proceed to apply, thinking that you are the ideal borrower when in reality any number of things can cause an application to be declined.

If in doubt give us a call on 1300 426 283 or email help@lendingmate.com.au.

Myths about borrowing money that needs smashing

I typed “borrowing money” into Google and up came with 44,600,000 results. The internet is such a great place for information gathering that it sometimes gives would-be borrowers myths instead of facts. These myths need to be dispelled because some believe it as 100% true.

 

1) Interest rate is the most important consideration:

Naturally paying less is what we all like to strive for but at the end of the day the saying “Interest rate means nothing if you do not meet the lenders policy” applies when borrowing money. Lenders all have different policies and rules that need to be followed when assessing a clients suitability for a loan. A lender may have a low rate but does the applicants unique, personal situation meet the lenders policy in order to be approved for a loan with that rate?

2) Loyalty to a lender certainly helps when borrowing money:

Loyalty used to come into the picture many years ago as a positive point when borrowing money, but due to the changing nature of lending, new regulations and also our own personal situations, this cannot always be relied upon. You may have banked with a certain lender for years and been a great customer but if the rest of your current situation doesn’t fit the lender, you may not be able to borrow money.

3) Alternative lenders have higher interest rates:

This is a concern I hear a lot. Just like shopping for groceries where going to a different outlet may involve varied prices, different lenders have different rates BUT they are not always higher. The only way to compare is to do your research when you are considering applying for a loan. Every lender has different products and promotions at various times meaning that what you see today may change tomorrow.

 

As you can see what we think we have come to know may not always be so. Do your research before you jump in, ask as many questions as needed and if you have concerns or the responses raise more questions, get a second opinion.

– Peter

Will multiple credit applications damage your Credit Score?

Borrowing money at times is portrayed as being simple and easy. Click here, apply there, give us a call are all methods that can start the ball rolling. As finance is very interest rate driven, a good option today may not be good tomorrow so, at times, you may shop around.

The issue is that when you do this for credit it can do more harm than good. Why?

When you apply for finance the lender will do what is known as a credit check. This is where an enquiry is added to your credit file that is recorded for a number of years. While it may seem like a simple thing, doing so numerous times in a short period can impact your chances of success with any future applications for finance.

 

“Shopping around for credit and applying to a number of different credit providers within a short space of time may negatively impact your Equifax Score. It flags you as a greater risk than infrequent applications for credit with a few credit providers”
Source: Equifax

 

So what can you do? When you are thinking of applying for finance consider the below:

  1. What do you need the funds for?
  2. Are you in a position to apply?
  3. Have you asked the lender upfront if your scenario may suit them?
  4. Do you know the documents and personal details that you need to have ready to apply?
  5. Anything in your past that may cause concerns with an application?
  6. Have you had all your questions answered so you know you are making a fully informed decision?

There are many more things to keep in mind but just like when boarding a plane overseas or going on holidays, do a full check to make sure you are ready. You will be glad you did.

– Peter

Your past shouldn’t always determine your future

When needing to borrow money the first thing many people do is go to the current lender they bank with or have previously borrowed money from. The reasons they do can include loyalty, simplicity and their money history being easily available.

To me, this used to make sense, but after a few years working in finance, coming across many clients who hadn’t been able to be assisted by their existing lender, I came to realise that this option should not be the only one you consider. Why?

When buying a product, if you cannot find it at one location, you usually go looking somewhere else for it. If this is the case why don’t many do the same when they cannot be assisted with finance from their lender?

According to lender Pepper Money, 54% of people turned down for a loan didn’t know there was another option available to consider.

(Source: Pepper Money)

Why is this you may ask? Life is forever evolving, so even though a lender may have helped you last time doesn’t mean they will this time as your situation or their appetite for certain client types may have changed. Also just like the shop that didn’t have the item you were after, they don’t have to advise you of an alternative if they don’t want to.

At Lending Mate we understand that employment and business conditions change, separations and health events occur, late payments happen and being self-employed is tough. Working with alternative lenders, those that look at things differently, we have been able to achieve many successful outcomes for borrowers who were previously advised there were no options available.

Together we help you navigate the difficulties and reduce the worries around borrowing money, allowing you to flourish again, aiming to improve your lifestyle.

If you have been told NO when applying for finance or have had a loan declined, know that there are plenty more fish in the sea.

Have you heard of..?

The advertising and marketing of products and services are prolific. Online, print media, bus shelters, hot air balloons, and billboards, you name it.

When it comes to financial services, whether borrowing money or needing debt help, we all usually know who the main players are, but not so many of the others as in reality. Those who advertise the most seem to get the lion’s share of the attention. If they have the money to throw around so be it, but what about the companies that haven’t got the same budgets to spend?

Years ago when I was looking for a new car I went to a dealership that I knew about through them advertising. They were not able to assist me with my needs as I was after a white manual hatchback which they did not have. Being pre-internet days (yes there were such times), I had to go to the Yellow Pages and look up other companies who may be able to assist me. After a few hours of searching, I found another dealer who had what I was after. When I got there I explained my situation and asked why I had never heard of their business. They said that they didn’t have the money to spend on advertising and also interestingly advised me that the dealer I had been to previously was part of their dealer group!

Why didn’t the first company advise me that there was another dealer that may have what I was after? The reply: ”They have a Manager who is only focused on his area and his sales”.

Moral of the story is that if someone is unable to assist you with your needs, look around and ask questions until you get what you are after. Most times those who you don’t know about have what you are after.

– Peter