How credit policy can help clients through tough times

IN Partnership with

New Zealanders are increasingly facing challenges refinancing or buying homes, but Pepper Money country head Campbell Smith says the non-bank lender’s policy could make all the difference for mortgage advisers and their clients

A STEADY tightening of credit availability alongside ongoing inflation has translated to significant economic contraction for Kiwi householders, says the leader of non-bank lender Pepper Money New Zealand. “For some, staying afloat on a rising mortgage rate is increasingly challenging, while for others the dream of ever purchasing a home can seem to be drifting further out of reach,” says Pepper Money country head Campbell Smith. “Policy may be the answer.” Pepper Money has developed a range of policies that together can act to create a bridge to help advisers’ customers during tough economic times. “The flexible thinking behind the options is what makes our approach a bit different,” Smith says. “There’s been a lot of focus on serviceability assessment buffers – and while we agree with industry peers that some borrowers could be assessed on a lower rate, it can’t be the only way to support them.”

Pepper Money is one of Australia and New Zealand’s leading non-bank lenders. Established in 2000, the company first launched as a specialist residential home loan lender in Australia with a focus on providing innovative home loan solutions to customers who were being underserved by traditional lenders. Today, Pepper Money has a broad product offering of residential home loans, personal loans, asset finance, novated leases and commercial real estate loans across Australia and New Zealand.

Find out more

“In times of uncertainty, borrowers need some financial stability and surety to help them navigate these market conditions and not get locked out of homeownership

Campbell Smith, Pepper Money

That’s why Pepper Money has been developing a range of policies that can work together to provide customers with the options they need to manage in this challenging environment, says Smith. “In times of uncertainty, borrowers need some financial stability and surety to help them navigate these market conditions and not get locked out of homeownership. “There is no one answer. A number of policy levers are required to deliver the solution. By providing options on things like length of term, or by capping repayments, we

Pepper Money’s view on the current market is that for some people in certain situations, what they need is a temporary solution providing support until the environment stabilises or their circumstances improve. Smith says that means offering pragmatic help. “It’s a position that is certainly true to the Pepper Money values and mission to help their customers succeed. “We take a flexible and balanced approach to policy in order to give customers the help they need to stabilise or to even be included.” Smith encourages mortgage advisers to talk to their business development managers about finding a solution for their clients. Pepper Money makes it easy, he says. The Pepper Product Selector* can give advisers an indicative response in under five minutes, and “we have an accessible credit team who are always ready to workshop any scenarios”.

As well as credit history issues, Sheridan had a low deposit, and the house she was looking to purchase needed some work up front. It was a tricky situation. She badly wanted to buy a home for herself and her young daughters. Ironically, the loan amount Sheridan was looking for would have meant paying less than renting, but when she took the idea to her bank it was a flat no. Sheridan went to other lending establishments for help, but they all turned her down. She was on the point of giving up completely when a financial adviser she’d been recommended said he wanted to contact Pepper Money on her behalf.

Pepper Money provided this case study as an example of how the non-bank can assist customers who are facing significant obstacles: After a divorce, Sheridan , a single parent, was close to giving up hope of ever owning her own home. She had a bit of history getting in the way. Having had debilitating health issues for a long period a few years back, she had gone through significant financial difficulty as a result. After falling behind on her bills, Sheridan ended up going through a no-asset procedure (NAP). She had since been discharged, but it was still a problem.

He said Pepper Money was the sort of lender that specialised in complex situations, and they would find a way to help if they could. The financial adviser workshopped the scenario with the Pepper Money team, and eventually they were able to find a solution. Working with policy options on credit history issues, gifted funds from family and a pragmatic approach to the loan term, the team made Sheridan’s home loan dream suddenly become real. An application was successfully submitted and approved. Sheridan and her girls had found their new home. It was an outcome the whole team celebrated! Name has been changed for privacy reasons

Pepper Money photo for main wide pic slot ono NZAW exclusive September IDC

Range of policy solutions

How Pepper Money helped Sheridan leave her past behind

Published 28 Aug 2023

Resources

News

Specialty

Best in Mortgage

Mortgage Industry

Companies

People

Newsletter

About us

Authors

Conditions of Use

Terms & Conditions

Sitemap

RSS

News

MORTGAGE INDUSTRY

BEST IN MORTGAGE

SPECIALTY

Resources

Companies

People

Newsletter

About us

Authors

Conditions of Use

Terms & Conditions

Sitemap

RSS

News

MORTGAGE INDUSTRY

BEST IN MORTGAGE

SPECIALTY

Resources

Companies

People

Newsletter

About us

Authors

Conditions of Use

Terms & Conditions

Sitemap

RSS

“By providing options on things like length of term, or by capping repayments, we can help advisers build these customers the bridges they need to achieve their financial objectives”

Campbell Smith, Pepper Money

can help advisers build these customers the bridges they need to achieve their financial objectives. This is the driver for our newest Red Hot Refinance offer available to our broker network right now.”

Important to know: All applications to us are subject to us completing responsible lending checks and considering the borrower’s individual circumstances. Credit assessment, eligibility criteria, lending limits, terms, conditions, fees and charges apply. The information in this article is a guide. It’s not intended to imply any recommendation about any financial product(s) or constitute tax advice. For more information about our products, please refer to our online product guide, or talk to your BDM. Of course, if your client requires financial or tax advice they should consult a licensed financial or tax adviser. *Pepper Product Selector is a great tool for quick responses. But please note that terms and conditions apply to its use. Any indicative offer is not a formal approval for a loan, and financial commitments must not be entered into based on that indicative response. It’s not a suggestion or recommendation of any particular loan product. It’s a guide only based on the basic information provided and the credit history information obtained for the primary applicant. The actual interest rate and approval will depend on the applicant’s circumstances and their information verified during the loan application assessment after a formal application has been submitted. The final interest rate may be more or less than the rate provided in the indicative offer. If there are two or more applicants, the circumstances of the other applicants may affect our decision regarding any formal loan application. This case study is not a testimonial and is provided for educational purposes only. It is not a substitute for professional advice. Outcomes will vary depending on individual circumstances. © Pepper New Zealand Limited NZBN 9429031065153 | NZ Company Number 3416551.

If the bank says no – always give it the Pepper Money non-bank test. Do you have a client the bank has said no to? Talk to us today. Pepper Money: 0800 945 658 scenariocentre@peppermoney.co.nz adviser.peppermoney.co.nz

Pepper Money at a glance

Year established

2000

Number of employees across Australia and New Zealand

1,000+

Number of accredited mortgage advisers

18,000+

Number of customers served (cumulative since 2004):

409,297

Number of electric vehicles financed by Pepper Money in Australia

6,000+

Assets under management

$18.9bn

Broad range of acceptable income types No limit to debts consolidated (including business and tax debt) 2- and 3-year fixed interest rates 40-year loan terms for P&I non-conforming options

Pepper Money offers red-hot refinance opportunity for clients

Deal assessment flexibility: Serviceability buffer reduced to 2% across the board

Speed of response: Rapid credit response within 24 hours

Flexible policy options for your refinancing clients, including: