What is a Specialist Lending?

Specialist lending is a segment of the mortgage market dedicated to providing alternative home loan solutions to borrowers who are unable to meet the lending criteria set by banks and Lenders Mortgage Insurance (LMI) providers.

There are numerous reasons why a borrower may fall into the specialist category and there is no single characteristic that pigeonholes every specialist borrower together.

Common reasons why borrowers may need a specialist lender:

Doesn't meet mainstream criteria
Doesn't meet mainstream criteria

  • Failed to meet LMI
  • Failed to pass credit scoring
  • Previously been declined
  • New Australian permanent residents

Requires flexible solution
Requires flexible solution

  • Multiple debts to consolidate 
  • Needs to payout business/tax debt
  • Cash out needed for business purposes
  • Refinance of private/solicitor finance

Impaired credit history
Impaired credit history

  • Discharged bankrupt
  • Late payments or mortgage arrears
  • Defaults, judgements or writs
  • Part IX & X debt agreements

Can't provide traditional documentation
Can't provide traditional documentation

  • Self-employed < 2 years
  • ABN registered 6 months
  • Income from casual employment
  • Income from family payments

How is specialist lending different to mainstream lending?

Fundamentally, there is no difference to how you would approach offering a specialist home loan to your clients. You will still follow the same line of enquiry in relation to the borrower's requirements, objectives and financial situation, and then take the appropriate steps to verify the information.

As a specialist lender, we use a more personalised approach:

  • Manually assess every application
  • Broader credit policy
  • Examine each individual’s circumstances as a whole and not just their credit score, to get a full picture of their financial situation

How can I introduce a specialist solution to my client?

5 Step Process

The challenging part of specialist lending is neither the assessment nor the writing of the loans. Where a challenge can lie is in offering a specialist solution to your client, especially if they were expecting a prime solution from a traditional lender.​To help you understand how to successfully present a specialist solution to your clients, Pepper Money has devised the following 5 step process:

  • Step 1​: Acceptance Mode
  • Step 2: Offer the Alternative
  • Step 3: Offer the Repayment
  • Step 4: Long Term Objectives
  • Step 5: Proceed to Application

Find out how to practically apply this model to your business

Pepper Money accredited brokers can complete our Specialist Lending eLearning module

eLearning Program

Find out why top performing brokers are sold on Specialist Lending

Click on the unlocked profiles below to see how these brokers have used specialist lending to help their clients achieve their goals.

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