23 AUGUST 2010
Mark Bouris is bringing competition back to the home loan market and helping first home buyers into the property market with the launch of Yellow Brick Road’s First Step home loan option, which does not require the borrower to demonstrate a savings history with a financial institution.
With First Step, the origin of a buyer’s deposit is not a factor in determining their suitability for a home loan. Deposits for a First Step option can be sourced from a range of options including gifts from a parent or other family member, an inheritance, windfall gains and tax returns, which can help first home buyers enter the market more quickly.
Mark Bouris said “First home buyers are being squeezed out of the market by the big banks, which are simply not providing adequate funding options for them. The big banks often require a borrower to show that their deposit is the result of a long term savings plan, which can make it much harder for people to buy their first home. I don’t believe this is an indicator of their ability to make their mortgage payments. More important factors are their income and their credit history; not the origin of their deposit.”
“In reality, this policy by the banks of insisting on a savings record benefits the banks’ profits by boosting their deposit base. It does nothing to help first time buyers.”
The launch of the First Step option comes at a time when Australian Bureau of Statistics figures show that first home buyers are finding it more difficult than ever to get a foot on the property ladder. June 2010 figures show that, over the last 12 months, first home buyer commitments, as a percentage of total owner occupied housing finance commitments, decreased by 11.1% – which is a massive drop of around 60,000 first time buyers out of the market.
The First Step initiative has been made possible through Yellow Brick Roads’ partnership with Gateway Credit Union. This follows on from the initial successful launch of a range of competitive home loan offerings in December last year.
Mr Bouris said “Yellow Brick Road’s priority is to ensure that we are both lending responsibly and providing competitively priced loans that make home ownership a reality for more Australians, giving them an alternative to the vanilla loans from the major banks.”
Mr Bouris said Yellow Brick Road is one of very few major, independently-owned financial services organisations originating home loans in Australia.
“All the major non-bank lenders from the pre-GFC era have either been acquired by one of the big four banks or are brokering home loans for them. They just recycle what the banks give them.
“Yellow Brick Road focuses on providing the best home loan products and independent advice that serves the needs of its clients, both individuals and small businesses. “
Yellow Brick Road currently has 34 branches in Sydney, Melbourne, Brisbane and the Gold Coast, with 50 branches expected nationally by the end of 2010.
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