Mortgage managers are finance specialists who organise funding for property investors and home buyers from numerous sources. Their role is to not only arrange the necessary funds for your property loan, but also manage and administer your loan for its duration, from credit assessment right through to monitoring your repayments, applicable insurance and renewals, interest rate adjustments and any variations for the life of the loan.
Many prospective borrowers are not fully aware of how mortgage managers operate (or even their existence for that matter!), and as such are concerned as to their safety and reliability. The fact is mortgage managers do not represent any type of issue for borrowers and can be of great benefit, as they do not lend their own money for home or investment loans, but instead source their funds from a variety of independent lenders. In other words, they do not act as banks or take deposits.
Mortgage Managers use many different sources to arrange funding for home and investment loans, including unit trusts, superannuation funds, securitised funds and even the banking sector. In fact a common source of funds for mortgage managers are some of the smaller banks that do not have extensive and costly branch networks, which allows mortgage managers to pass on their more competitive rates to clients.
The mortgage manager is not responsible for any funding at the end of the day, as the original provider of the funds (who works through a trustee) owns the mortgage in entirety. The trustee’s role is to ensure that the mortgage manager is professionally and appropriately managing your mortgage on a daily basis.
For instance, if your mortgage manager ceased operations at any time over the duration of your mortgage, the trustee would appoint another mortgage manager to continue administration of your mortgage under new management.
Mortgage Managers are a great asset to borrowers, for two reasons.
Firstly, because they have their own DLA’s (Delegated Lending Authority), if they like the application they can approve it on the spot without referring to the funder. This usually results in faster approvals and gives them the ability to pick and choose the type of business they’d like to have on their books.
And secondly, they are competitively priced. An example of this is a mortgage manager called Choice Lend (Funded by NAB), who are currently offering investment loans for 5.80%, which is not bad when you consider that Westpac are charging 6.06% for their comparative product.
Mortgage Managers are certainly worth considerating now that NAB is one of the major underwriters in the market.
