Mortgage Brokers

Yes, HRL will pay mortgage brokers a commission to refer MA buyers to our website application form and help them complete it. The broker registration is at http://mortgagealternative.com.au/register/

To secure their commission, brokers need to “tag” their details to the applicant buyer(s) in our system, by simply completing the box on the buyer application form inserting the mortgage broker’s own name and mobile number. It’s as simple as that.

Brokers are encouraged to assist home buyers to consider MA and to seek independent professional advice. The broker must be registered as above by Haigslea Residential Limited at the date of the home buyer referral. The commission is paid on a notional mortgage of 100% of the value of the property to the Fund at the date the Fund acquires it and resells it to the home buyer (unindexed). There is no trail.

This is an opportunity for mortgage brokers to open up a new commission stream for themselves. MA produces a unique new channel of MA buyers that either cannot get mortgage finance, or who can, but prefer MA’s unique features and benefits to those usual features of a traditional mortgage, in their personal circumstances. The relative ease of exit from MA is compelling for a home buyer, should a buyer need to exit in a down market, compared to a mortgagor’s position.

Features such as no need for a parental guarantee, the certainty of payments, locking the home price now at a pre-agreed 10 year price, no mortgage insurance or other upfront costs, ease of exit and greater peace of mind with no mortgage debt for up to ten years.

The key benefits compared to a conventional mortgage lend up to 97% less LMI of around 2.8% on an average $500,000 home at 5% deposit include:

1. Mortgage Alternative (MA) does not require LMI at all, so there is no requirement necessarily for 5% genuine savings. We judge each case on its merits, so all or part of the deposit may come from parents or grandparents. Each case is credit assessed on all facts and circumstances in the MA Buyer’s application;
2. MA’s 5% deposit (can be as low as 4.5% in some Australian States for homes under $500,000) includes the MA buyer’s stamp duty. Buyers do not need to independently fund that from savings or from elsewhere. This is especially important for buyers who have owned an apartment or home before, and especially so if the property they prefer is $550,000 or more, where stamp duty in Qld can begin to hurt previous home owners trading up or wishing to live closer to the CBD.
3. MA simply gets buyers into their dream home sooner and out of the uncertainty of tenure of the private rental market, but with no exposure to future interest rate rises for up to ten years – as the MA buyer has no mortgage in the first ten years.
4. Parents no longer need to go guarantor or offer family pledges to a mortgagor, as MA buyers can elect to terminate the contract and simply move out in adverse personal circumstances, returning the home to the Assquire investor (who remains on title, as per usual, until buyer settlement.
5. At just average 5% pa actual capital growth over the 10 year MA mortgage incubation period up to settlement, a buyer can accumulate up to a 30% deposit when they settle.

Whilst we have our own Mortgage Alternative Fund to buy the homes the MA buyers choose, we believe many real estate vendors and current landlords would welcome the exposure of their property to this new buying channel on an unconditional finance sale contract, with a ten year lease and that may present a useful synergy for mortgage brokers and their real estate agency networks.

History of Product Market Sounding

MA is an innovative new financing product launched softly in Brisbane in research phase, on December 20, 2013, into the consumer market via Facebook and only to Brisbane city residents. That soft launch was extended (again in research phase) in early March 2014  to the city of Melbourne for greater geographic diversity of MA buyer response, as we extend and broaden our research into customer demand. The response proved demand and allowed us to test our online application systems and processes, and refine the product offering for feedback received.

The Haigslea Residential Limited management team is now accepting live applications and are currently actively training and accrediting early distribution channels. HRL are preparing for the introduction of wider distribution channels currently, having tested its online Expression of Interest (EOI) process previously and processing the first Brisbane registrants successfully through Part One of the research phase registration process, including the early pre-qualifying stages of a credit assessment process.

For institutional capital to be applied on a timely basis to parties “presold” on MA, we are seeking to first run with our own Fund, then later possibly individual residential property investors (many current landlords) who can live anywhere in Australia, but invest as an  investor in homes now offering accelerated stable predictable yields in Brisbane, then Sydney and possibly Melbourne – on the basis of a matched credit prequalification from an MA buyer and a desired home listed for sale.

The total process with our own Mortgage Alternative Fund at the start is designed to accelerate and facilitate the matching process and to procure an easy and fast qualifying process for the home buyer, in a home of their own choosing.

The MA buyer transacts knowing they have a “security blanket” if they encounter an adverse personal circumstance like divorce or loss of job, without encountering a growing mortgage debt and possible mortgagee or “fire” sale, plus selling costs. They simply exercise their right to terminate and vacate, returning all capital growth to date to our Mortgage Alternative Fund – who may potentially resell the property elsewhere – to another MA buyer or generally in the open market.

An upfront panel market valuation (also commissioned by HRL) will underwrite the Fund’s position and the negotiated properties will be presented on a batched basis for individual consideration and funding approval or rejection by our Mortgage Alternative Fund.

Real estate agents remain commissioned and paid by the vendors, without any need to conjunct. Mortgage brokers are offered a broking commission by HRL of 0.6% of a notional loan equal to 100% of the current valuation of the property, paid when HRL has its commission released under the Purchase Contract terms – expected to be 28 days after the consumer moves into occupation of the property with all preconditions for release of the MA Buyer’s deposit met.

Upon customer application for MA, there is a short waiting period to see if MA buyers pass our credit prequalification, and then a process of selecting a home. These homes can be presented to HRL from the open market through any  real estate agent or builder, or from a shortlist compiled by MA with assistance from a buyer’s agent.

Liaison with Mum and Dad vendors of established homes selling to our Mortgage Alternative Fund is the role of the real estate agents as per normal.

MA produces a new channel of buyers, and a sales opportunity for each of HRL/Mortgage Alternative, a mortgage broker, a Buyer’s agent (where involved), a builder (where involved) and a real estate agent.

The Role Of Mortgage Brokers:

Mortgage brokers have their own lists of buyers struggling with finance.  These buyers could be introduced to MA’s website and assisted to complete the on line application at http://mortgagealternative.com.au/register/ in a friendly and personal way that captures the client relationship early on, with a clear opportunity to retain a client connection to offer mortgage finance down the track, when the customer chooses to convert from MA to a traditional mortgage.

By being front of mind through your early association with the MA buyer, you are well placed to continue that mortgage relationship when the MA incubation period has ended. MA customers have the option to settle at the pre-agreed price at any time up to the contract end-date or vacate the property and not settle. There is more control with MA, more flexibility and ease of exit if their personal circumstances change adversely, and their payments are pre-agreed for greater certainty.

We are currently in the final stages of completing the establishment of our planned Mortgage Alternative Residential Fund No 1 (MARF 1), and in the interim, HRL management representatives and our registered mortgage brokers will fulfil a liaison role with the first conditional approved applicants, as part of our current 2022 customer order build.

Mortgage broker groups are encouraged to play a role in encouraging both real estate agents and their potential MA customers towards our MA website, to register for no obligation at http://mortgagealternative.com.au/register/ to see if they qualify for MA.

During calendar 2022, all direct or indirect leads of home buyers will be referred back to one of our approved mortgage brokers, to ensure consistency of service. This means we’ll be paying a broker commissions on 100% of our approved buyer enquiries who move into homes, whether they start with a mortgage broker or not.

This acts as a means to mutual sales and commission opportunities and begins the process of purchase and sale of properties by our Fund investors followed in time hopefully by institutionally funded and separately licensed Mortgage Alternative Residential Funds.

We trust this provides a useful introduction to MA, and how you may play a role as a mortgage broker, and how that relates to the roles envisaged for a real estate agent or buyer’s agent, assisting HRL’s team to assemble a suitably-sized batch of matched prequalified buyers and homes that can be presented by us to our Funds.

All enquiries: phone Barry Parker on 0413 740 344 or Keith Burchill on 0419 903 381 or email Barry.Parker@haigslearesidential.com.au or keith@mortgagealternative.com.au.