Finance Not From a Bank

[NzDuder]

Hi

I'm currently seeking finance for my third investment property(cashflow+) but I can't get any more than 70% mortgage from any of the banks.

I have 20% equity in my current two investments and they are cash flow positive by a good margin.

My broker has found a company called "Sovereign" their website looks the real deal but how well known are they and are they as solid as a bank?

Thanks Duder

[Keithw]

Sovereign are HUGE
ASB & Sovereign have some sort of tie-up

[Monkeyboy]

ASB group own Sovereign. Sovereign are insurance with mortgages being new to them. They are also the largest mortgage provider outsude the banks. You should be pretty safe. They have some good products.

[JohnL]

CBA (an Australian bank) own both the ASB and Sovereign. Not sure of the detail but should be as safe as any other bank down under.

John

[Stickman]

Since they are underwritten by the same owning company, they should be just as safe as ASB I would have thought. I have held one mortgage with them in the past, no different to any other banks in my opinion. All loan facilitation is done through the ASB...or was for me anyway.

[Green Fish]

Sovereign

Sovereign is an insurer, usually. It may have moved into lending, but from a borrower's perspective, who cares? Solvency is an issue for the lender, not the borrower.

[Austrokiwi]

Sovereign is an insurer, usually. It may have moved into lending, but from a borrower's perspective, who cares? Solvency is an issue for the lender, not the borrower.

In today's economic climate, solvency of the lender is an issue for borrowers. If the lender gets into trouble.it may well see the receiver or purchaser of the distressed lender, re-assessing the risk level of loans. Where that risk is too high they could request the borrower to either refinance with someone else or pay enough cash to drop the lending into a better risk profile. If you were told to refinance with someone else and were already using one of the last resort lenders I would guess you would be up the creek without a canoe or paddle.

[chuck1]

In today's economic climate, solvency of the lender is an issue for borrowers. If the lender gets into trouble.it may well see the receiver or purchaser of the distressed lender, re-assessing the risk level of loans. Where that risk is too high they could request the borrower to either refinance with someone else or pay enough cash to drop the lending into a better risk profile. If you were told to refinance with someone else and were already using one of the last resort lenders I would guess you would be up the creek without a canoe or paddle.

We have already seen these issues in NZ with loans funded by GE who have pulled out of the NZ market.

Borrowers still with GE are paying interest at 2% above market rates and can not get top ups or decent service on their loans

[Viking]

Make that 3.5%

[Perry]

Read the small print about assigning
the loan. It seems to be common with
debts and now, maybe loans, too?

Check some Credit Unions, as well.

[MoatMaster]

As someone mentioned, Sovereign are huge. They are one of the biggest insurance providers but provide excellent loan products on par with with the main trading banks.
I have put deals to them for years without any issues. The only reason you may not have heard of them is that they are only available through the broker network, or NZ Homeloans.

[mortgage broker]

Yeah Sovereign is a good lender, great service (depending on your broker). They are owned by ASB who always rate very highly in terms of service and being fair in terms of break fees etc.

Last resort mortgage providers can be a disaster for some people its true, I have never felt that sovereign is in this category.

Funnily enough sometimes when the mortgage provider closes its doors it can be a good thing, I had a client with one of the 2nd tier non bank lenders. When they closed the doors my client's loan was being managed by some trust account. Their interest rate dropped from what used have a risk margin loaded to a normal bank floating rate.

GE I feel, are one of the more ruthless of lenders in terms of home mortgages, luckily my gut feeling kept me from ever doing a deal with them. Of the last 200 loans I have settled, not one was with GE.

[Kiwi10]

I currently have a mortgage with Sovereign as my partner had credit issues I was unaware of and so we went for a mortgage on my income alone and my broker didn't add some cash I had in savings. They have the best service I've ever received from any bank etc, easy to check out any details on the web and if I phone they answer within a few rings and have been able to deal with any query I've had. At the last minute I wanted some changes done to amounts fixed and I wanted multiple different fixed terms and they had no problems changing it all for me.