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Non Bank Loans
What is a Non Bank lender ?
Non Bank lenders for property purchases has grown at a very fast pace recently. Essentially non Bank lenders perform functions similar to banks and other finance companies. They lend to a wide range of Borrowers. Generally they finance their lending by securitizing their loans or with funding from private investors, which can include high net worth individuals or institutional investors or commercial lending Banks with excess loan capacity. There are many resources and many different types of structures.
Why Choose a Non Bank Lender?
There is more and more competition in the mortgage industry and as a result there are more lenders with better alternatives than a traditional Bank.
Some of them are very niched and they maybe in regional areas only. Some may specialise in apartment buildings.
Other lenders may have more relaxed rules regarding the deposit or flexibility when determining the income capacity of the potential borrowers. They may not adhere to the very strict rules that banks often insist on.
Are there Branches for Non Bank Lenders?
Generally non bank lenders do not offer deposit accounts, they are generally only interested in providing loans against property. They do not provide bricks and mortar facilities that most of the major Banks do.
Where do non Bank lenders get their funds from?
Generally they will get from the wholesale money market where they borrow in bulk and then they lend to individual property owners. The government supports this type of funding because they realise that without it that would reduce significantly competition.
What are the advantages of using a non Bank lender?
Non banks are not weighed down by large corporate structures and branch networks. As a result they generally pass on the savings to their customers in the form of Lower interest rates. Some of the best interest rates are only available through non Bank lenders.
Non-bank lenders can also be very flexible in determining income and may use your latest bank statements
Or payslips to determine your ability to pay, rather than just the last 3 tax returns.
Also some banks want 30 to 35% deposit for apartment buildings where there are some non Bank lenders that accept 20% or 15% deposit. In those circumstances you may not have been able to get a loan at all through the banks but you may be able to get a loan with a non Bank lender.
Generally the advantages come down to flexibility and choice regarding deposits, purpose for borrowing, and the types of borrowers they will accept. There is also a wide range of lenders who can cater for nearly every loan purpose.
How Do I Get Started?
Generally it is the same for all types of loans. Go to the get a free credit report page from the menu link above. Once we receive the report we can discuss your options and if anything on the report needs to be addressed. We can then discuss the best loan for your needs and suggest an appropriate loan type. You then can start the loan process.
See also our loan page which outlines the steps in the process.
What is the Single Most Important Reason in Choosing a Non Bank Lender?
Flexibility in deposits, income assessment and generally lower rates relative to banks due to lower overheads.