Every major bank has a standard set of rules that every loan application is measured against. It is the set of rules that will measure your suitability for a loan and will be the basis of the bank’s decision regarding your application. A non-conforming loan is a term used for loans which were designed for potential borrowers who do not fit the standard rules.
A non-conforming loan may also be referred to as a low doc or specialist loan, depending on who you are dealing with. Quite simply, the term non-conforming loan is a catchall for any loans that are made for people who don’t fall into the traditional rules. While you might not be overly familiar with the term, you will likely be surprised at the sheer number of Australians who have had their home loan applications rejected simply because they fall into the non-conforming category.
But, why? And, who falls into this category? There is a wide range of people who may fall into the rejection pile because they don’t measure up to the standard rules. This group of people includes self-employed individuals, those who have just recently started a new job, recently opened a new business, don’t have the perfect credit report, have been bankrupt (whether discharged or not), Australian Tax Office debt, a solid income but low deposit, a healthy deposit but low income, a gifted or inherited deposit, regularly changes job, or have a need for debt consolidation. There is also a risk of rejection if you’re a newly established Australian resident and you haven’t had time to build your credit file in the country.
So, as you can see, that covers quite a lot of the country, doesn’t it? Thankfully, the world has evolved beyond bank lenders and you may find a friend in an established non-bank lender like Seek Mortgages. Non-bank lenders design their home loan products around the people who need help securing home loans. This makes them far more flexible in their approach than traditional lenders. With a non-bank lender, you will work with a professional on a one-to-one basis to determine your state of affairs, as well as your needs, to ensure that you find a great alternative.
It’s easy to understand why so many Australians lose hope after dealing with the rejections of banks, but as you can see from the above there are a lot of people who don’t measure up to the standard set of rules they work with. You’re not alone and it’s not over till it’s over. Which is where a non-bank lender can lend you more than a helping hand. You’ll have someone to guide you through the process and find the right type of loan for both your circumstances and needs.
If you would like to learn more about what non-bank lenders can do for you or you just have questions that you need to be answered, get in touch with us today to discuss your options. A no from the bank isn’t the last no.