What is it ?
A non-conforming loan (or specialist loan) is generally a loan for those who find it difficult to secure finance with traditional lenders.
It is often for people who may have:
- Mortgage arrears on their current loan
- Negative credit history debt (defaults or bankruptcies)
- Self-employed and don’t have the usual financial statements required by most lenders, or have only been self-employed for a short term (most lenders require 2 years of employment history)
- Have a small deposit
- Have previously been refused a loan with other lenders
- Have no stability in employment or residential history
- Too many other debts (credit cards, car loans, personal loans)
There are a number of lenders out there that will consider lending to customers when the traditional banks won’t.
You do need to be mindful that a non-conforming loan can come at a higher interest rate and with higher fees, however if you can obtain a loan you require initially, then there may be a chance for you to refinance to a traditional lender down the track once you have rectified the issues that originally led you to a non-conforming loan.
You may be able to purchase a property or refinance your current home loan / debt consolidate, when you thought there was no solution for you.