Pepper Money expands Prime Alt Doc offering

Non-bank lender Pepper Money has reduced the required income verification documentation for self-employed borrowers applying via its Prime Alt Doc product.

The lender will now only require borrowers to supply either business activity statements (BAS), an accountant’s letter, or business bank statements.

The changes were implemented on 29 April and will apply to all Prime Alt Doc applications.

The lender has also increased the maximum loan amount available to borrowers, with its Prime Alt Doc product now enabling clients to borrow up to $1.5 million and Prime Full Doc option now up to $2 million.

Pepper Money has moved to increase loan-to-value ratios (LVRs) for self-employed borrowers to 85 per cent on Prime Alt Doc options, with loan limits dependent on security locations.

The maximum LVR has also increased on the lender’s Near Prime Clear Alt Doc and Near Prime Alt Doc offerings to 80 per cent for category one and two locations.

The lender said its servicing calculator had also been updated to “simplify income calculations for self-employed applicants”.

Barry Saoud, Pepper Money’s general manager of mortgages and commercial, said that the lender had altered the product policies to support the “changing needs” of self-employed customers.

The lender revealed that more than 40 per cent of its customers were self-employed and that approximately one in three applications used an alt doc solution.

Speaking on the lender’s updated verification options, Saoud said: “Mainstream lenders often don’t offer these alternative ways of verifying income at a prime bank rate.”

He said that brokers would be able to assist more clients due to the changes.

“We know that self-employed clients are a little different when it comes to demonstrating income, and with these changes we’ve introduced, brokers can assist more clients by providing a single verification of income across all of our loan options,” he said.

Dumith Danister, a Victorian-based broker from Prime Choice, said that Pepper Money’s expansion of the loan amount was a “significant step forward”.

Danister said: “The expansion of the maximum loan amount is a significant step forward in addressing the servicing challenges we’ve been facing in the current market.”

Pepper Money’s general manager of mortgages and commercial also said the changes were made to support brokers and provide them with “ease and efficiency”.

He said: “We understand the pivotal role that brokers play in connecting borrowers with the right financial solutions. Therefore, we are constantly refining our processes and systems to ensure brokers can access our services with ease and efficiency.

“In essence, our recent changes to the Prime Alt Doc product are more than just policy adjustments. They represent our ongoing commitment to inclusivity, simplicity, and service excellence for brokers.

“Our diverse range of verification options, coupled with our flexible service, sets us apart in the market. We understand the unique needs of self-employed borrowers and are committed to providing tailored solutions.”

Pepper Money recently priced its second public securitisation for 2024 on a car and equipment asset-backed security transaction.

[Related: Pepper Money prices second public securitisation]