Non Conforming Home Loans
If you don’t meet traditional bank criteria because you are either: close to retirement, are a seasonal or contract worker, non-resident, small or no-deposit holder or have a bad credit history, you may want to consider a Non Conforming Home Loan.
While you will typically pay a higher interest rate for non conforming loans, some non conforming lenders now offer interest rate reductions after 12 months or so of consistent, on-time payments. This clean record will also increase your chances of refinancing your loan with one of the mainstream lenders. Talk to your local mortgage broker and find out what your options are.
When Would I Consider a Non Conforming Home Loan?
You may find that you fall under the Non Conforming borrowing category if:
- You are starting a new business or recently started a new business.
- You are changing jobs or are on probation.
- You previously had an irregular income.
- You are receiving Centrelink Payments or benefits – unemployment benefits do not qualify.
- You have a bad credit history and have a satisfactory explanation for this.
- You have tax debts that need to be paid out as part of the refinance.
- You have a large number of CRAA (Credit Reference Association of Australia) enquiries.
Bear in mind that in all these situations, you would still have to satisfactorily prove to the non conforming lender that you are able to meet the repayments. You may also have to consider borrowing less than you would if you were going for a standard loan and pay a higher interest rate
Need Help or More Information on Non Conforming Home Loans?
If you would like more information on Non Conforming Home Loans or to talk to a mortgage broker about home loan options that are in your best interest, call us on 13 LOAN (or +61 2 9249 3739 for international callers) or email us the form on this page and we will return your contact within 2 business hours.
Advantages and Disadvantages of Non Conforming Loans
| Pros | Cons |
| Rates for non-conforming loans are much lower than they were in the past. | Non-conforming rates are usually around 1-3% higher than a traditional loan, but rates depend on your level of credit impairment. |
| Non-conforming loans can be fully featured. | You might have to pay a hefty deferred establishment fee if you pay out the loan early. |
| Great way to rebuild a poor credit rating. |
My Non Conforming Home Loan Interest Rate
As a rule of thumb, if a lender views you as ‘high risk’ then chances are, that your interest rate will be higher. Fortunately, as the different lenders have different rates and terms on offer, you will find that you still have options. Find out what your options are from your local mortgage broker.
More information and home loan help
For more information on how and where to find a better home loan deal from an extensive panel of Australian banks and secure mortgage lenders, or to speak to your local area mortgage expert, contact us on 13 LOAN (direct +61 2 9249 3739)
