By:
Aaron Taylor
Head of sales strategy and performance Bluestone
For brokers, understanding a customer’s circumstances early can be key to identifying when a standard approach may not work. From asking better questions about income and credit history to expanding into areas such as alt-doc, construction, commercial and expat lending, knowing which doors to open can help brokers broaden their lending proposition.
In his product roadmap, Broker Daily's Julian Barnes catches up with Bluestone Home Loans’s head of sales strategy and performance, Aaron Taylor, to explore how brokers can recognise these opportunities and find alternative pathways.
I think the shift over the last couple of years has been a lot more people either trying to get a second job, start a self-employed business on the side or change their income structure.
They’re going from PAYG full-time into a contract role where they can potentially increase their income, shifting into casual roles and working multiple jobs, or moving into the self-employed space.
There were a lot of new ABNs set up last year, so you’ve got these newer self-employed customers who sometimes aren’t even actually running businesses. They’re just contracting back and doing the same work.
They’re still not being looked at in the same way from a bank’s point of view and potentially need that solution-based lending approach.
When you’re looking at credit impairment, you can look at a credit score, sure, that’s one sign. But you can dig in deeper and look at their repayment history, which Comprehensive Credit Reporting gives you. That gives you a 24-month view.
You can also look at their actual statements and get a current view of where they are today.
For self-employed customers, you can get tax returns. But those tax returns were lodged in March to May this year for the last tax year, which is already over 12 months old.
Then there are lenders that will look at financial statements. Accountants can normally get financials prepared one to two months after the end of the financial year. That’s great, but they cover 12 months and are already two or three months out of date.
Then you can look at BAS, bank statements or a letter from an accountant to confirm the current income. That income is actually from the day of settlement or application, or the most recent quarters.
The differences in approaches across those three areas are huge. It comes down to what income you can show the lender based on the policy.
One of the things I’ve noticed is that the more experienced brokers are identifying those questions earlier because they’ve seen the signs.
That could be asking about how their credit has been, how their repayments have been, or even just how they’ve felt over the last 12 months. How are they finding inflation, changing rates and the changing market? That can be a really good indicator of credit quality and credit history.
You can really start to unpack early how that customer’s profile is going to look and get an idea of whether it’s going to be done at a bank with tax returns or whether they’ll need some more recent information, potentially looking at an alt-doc solution.
Accountants can normally get financials prepared one to two months after the end of the financial year. That’s great, but they cover 12 months and are already two or three months out of date.
- Aaron Taylor
It ties back to what customers you’re dealing with, what changes they’re going through and what policy changes will impact those customers. You don’t have to keep up with every lender and every policy. It’s more about keeping up with the policies that are close to the customer type you’re dealing with.
A lot of brokers still only work with four or five lenders, but what happens when one of them gets taken off the table?
If you have all your eggs in one basket and it gets taken away, you can get into trouble. So I think keeping up to date, whether it’s through webinars or AI systems inside your email that can give you a run-through of certain policy updates, is really important.
Then, if you’re identifying shifts in the market you’re dealing with, you want to reach out to some of the lenders in that space, sit down with them, have a chat about the products and the process and work out whether that’s going to be you.
We looked at who our customers are and how we can help them with a different problem they’re facing today than perhaps what they were a couple of years ago.
We’re still dealing with the same self-employed alt-doc core and helping them either invest in new property in the construction space, move into commercial property, or buy their business premises. That’s in the full-doc and alt-doc, as well as the SMSF space.
We also looked at investors who were struggling with servicing problems. Our calculator is very strong because of the way we assess income and other liabilities, which is different to other lenders.
If you have all your eggs in one basket and it gets taken away, you can get into trouble. So I think keeping up to date, whether it’s through webinars or AI systems inside your email that can give you a run-through of certain policy updates, is really important.
- Aaron Taylor
We looked at the people we were helping five years ago. They might have moved overseas and are now living and working overseas as expats, looking to invest back into Australia.
For us, we’ve kept it broker-centric. We’ve kept the same BDM, the same calculator, the same accreditation and the same lodgement process because we’re not trying to be everything for everyone.
We’re stepping in and trying to help brokers learn something new and step into a new space while we’re also doing the same. Two years ago, we weren’t doing construction, commercial or writing for expats.
We’re still new in this space and we’re building the products out as we grow, and it’ll continue to expand.
We’re stepping in and trying to help brokers learn something new and step into a new space while we’re also doing the same. Two years ago, we weren’t doing construction, commercial or writing for expats.
- Aaron Taylor
You can also look at their actual statements and get a current view of where they are today.
For self-employed customers, you can get tax returns. But those tax returns were lodged in March to May this year for the last tax year, which is already over 12 months old.
Then there are lenders that will look at financial statements. Accountants can normally get financials prepared one to two months after the end of the financial year. That’s great, but they cover 12 months and are already two or three months out of date.
Accountants can normally get financials prepared one to two months after the end of the financial year. That’s great, but they cover 12 months and are already two or three months out of date.
- Aaron Taylor
Then you can look at BAS, bank statements or a letter from an accountant to confirm the current income. That income is actually from the day of settlement or application, or the most recent quarters.
The differences in approaches across those three areas are huge. It comes down to what income you can show the lender based on the policy.
One of the things I’ve noticed is that the more experienced brokers are identifying those questions earlier because they’ve seen the signs.
That could be asking about how their credit has been, how their repayments have been, or even just how they’ve felt over the last 12 months. How are they finding inflation, changing rates and the changing market? That can be a really good indicator of credit quality and credit history.
You can really start to unpack early how that customer’s profile is going to look and get an idea of whether it’s going to be done at a bank with tax returns or whether they’ll need some more recent information, potentially looking at an alt-doc solution.
It ties back to what customers you’re dealing with, what changes they’re going through and what policy changes will impact those customers. You don’t have to keep up with every lender and every policy. It’s more about keeping up with the policies that are close to the customer type you’re dealing with.
A lot of brokers still only work with four or five lenders, but what happens when one of them gets taken off the table?
If you have all your eggs in one basket and it gets taken away, you can get into trouble. So I think keeping up to date, whether it’s through webinars or AI systems inside your email that can give you a run-through of certain policy updates, is really important.
If you have all your eggs in one basket and it gets taken away, you can get into trouble. So I think keeping up to date, whether it’s through webinars or AI systems inside your email that can give you a run-through of certain policy updates, is really important.
- Aaron Taylor
Then, if you’re identifying shifts in the market you’re dealing with, you want to reach out to some of the lenders in that space, sit down with them, have a chat about the products and the process and work out whether that’s going to be you.
We looked at who our customers are and how we can help them with a different problem they’re facing today than perhaps what they were a couple of years ago.
We’re still dealing with the same self-employed alt-doc core and helping them either invest in new property in the construction space, move into commercial property, or buy their business premises. That’s in the full-doc and alt-doc, as well as the SMSF space.
We also looked at investors who were struggling with servicing problems. Our calculator is very strong because of the way we assess income and other liabilities, which is different to other lenders.
We looked at the people we were helping five years ago. They might have moved overseas and are now living and working overseas as expats, looking to invest back into Australia.
For us, we’ve kept it broker-centric. We’ve kept the same BDM, the same calculator, the same accreditation and the same lodgement process because we’re not trying to be everything for everyone.
We’re stepping in and trying to help brokers learn something new and step into a new space while we’re also doing the same. Two years ago, we weren’t doing construction, commercial or writing for expats.
We’re stepping in and trying to help brokers learn something new and step into a new space while we’re also doing the same. Two years ago, we weren’t doing construction, commercial or writing for expats.
- Aaron Taylor
We’re still new in this space and we’re building the products out as we grow, and it’ll continue to expand.
Tune in to hear more!
You can listen to the full conversation with Bluestone’s head of sales strategy and performance, Aaron Taylor, in the Broker Daily Spotlight podcast, here:
Aaron Taylor
Head of sales strategy and performance Bluestone
