Non Conforming Loans - must have an existing property to use as security!

Non Conforming Loans have been designed to help borrowers who do not meet standard lending guidelines. This includes borrowers who have impaired credit, are unable to provide the usual documentation required in support of their loan or simply do not meet the lending criteria of mainstream lenders. They can be more expensive than standard or 'conforming' loans to cater for the perceived greater risk to lenders.

Non bank lenders offer loans which fall out of the standard bank lending criteria. Examples of non conforming parameters are: different income type, credit impairments, non standard property or zoning.

Advantages

  • You are able to get a home or business loan
  • Ususally fully featured loans with more options
  • Different, (more practical) lending criterias

Disadvantages

  • slightly higher interest rate
  • Fees and charges applicable

Question:

When should I consider a non conforming loan?

Answer:

Non conforming loans are useful for times in your life which may be challenging, difficult or don't fit within the standard bank lending parameters. Below are some reasons to consider non conforming loans:

 
  1. Difficult security - a borrower seeking non-traditional security such as company title, studio apartments, serviced apartments, warehouse apartments, vacant land or resort style accommodation.
  2. No financial statements - a business or investment borrower unable to submit formal income confirmation.
  3. Irregular income - business investment or home loan borrower with irregular or partially unsubstantiated income details.
  4. Self employed people with a short business history.
  5. Credit problems - a borrower with poor credit history ranging from slow repayments on any current loans to a credit default. 

Frequently asked questions from our clients regarding Non Conforming Loans:

 

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