What they are and why you might need one
All the major banks have a standard set of rules they use to decide if a loan application is acceptable, or not. A ‘non-conforming’ home loan is simply a term used for home loans designed for people that don’t fit those rules and are offered by non-bank lenders. Loans like these can also be called ‘specialist’ or ‘alternative’ loans (alt doc). Non-conforming may not be a common term, but you might be surprised how many Australians have been declined for a bank home loan because they fall into this category, and why. For example, people who are:
• Have recently started a business or a new job
• Don’t have a perfect credit history
• Been previously bankrupt
• Have an ATO debt to pay-out
• Have a solid income, but not much of a deposit
• Have a deposit but it’s an inheritance or a gift
• Work means they regularly change jobs, it looks like instability but it’s just the nature of the industry
• Need to consolidate debts such as personal loans, credit cards or business debt
• A new Australian resident, and therefore the previous credit history can’t be established.
That’s a large group of people. The good news is that those with these requirements still have lots of options. There are a multitude of non-bank lenders who have designed home loan products specifically to meet these needs. They take a much more flexible and holistic approach than traditional lenders and can provide a range of good alternatives.
If you’d like more information about non-conforming loans talk to us today. We have a panel of non-bank lenders who might be able to assist you where a bank has said ‘no’ to your loan application.