Non-Conforming Lenders
These types of lenders have been in Australia since the late 1990’s, which was a time when many such non-bank lenders entered the Australian Financial market. Since then they have been offering loans that do not fit the traditional bank lending criteria, hence their name, non-conforming lenders. In today’s Australian finance landscape there are over 12 major non conforming lenders that offer loans that with different lending criteria of the major lenders.
To make a broad assertion – non-conforming lenders will generally lend against:
Another way to describe non-conforming lenders is the term Sub-Prime (which is a well known American term) – these types of lenders account for approximately 5% of the current market in Australia. Typically – some of the large Australian lenders offer various non-conforming loans such as low doc loans (which some of the big banks are now getting out of), however, most non-conforming lenders deal more with borrowers with bad credit etc. which is the main differing factor. Low doc loans are non conforming loans. although recent changes to the National Consumer Credit ProtectionAct mean that even low doc loans are caught under the provisions of that legislation in relation to verifying affordability and serviceability requirements. It is also an important point to note than pretty much all non-conforming loans will be more expensive both in terms of the interest rate as well as ongoing fees that traditional full doc type loans – generally at least 0.1 -0.5% higher.
Non-Conforming lenders do all types of loans including
At Miller Finance we have access to a broad range of lenders and strive to find clients the most appropriate product that will help them meet their needs and objectives. Feel free to reach out if you need any help.
- borrowers with poor credit history
- borrowers with unusual income streams from your typical PAYG employee
- recent migrants in Australia
- different types of security
- restricted postcode zones
- unusually specialized and structured loans
Another way to describe non-conforming lenders is the term Sub-Prime (which is a well known American term) – these types of lenders account for approximately 5% of the current market in Australia. Typically – some of the large Australian lenders offer various non-conforming loans such as low doc loans (which some of the big banks are now getting out of), however, most non-conforming lenders deal more with borrowers with bad credit etc. which is the main differing factor. Low doc loans are non conforming loans. although recent changes to the National Consumer Credit ProtectionAct mean that even low doc loans are caught under the provisions of that legislation in relation to verifying affordability and serviceability requirements. It is also an important point to note than pretty much all non-conforming loans will be more expensive both in terms of the interest rate as well as ongoing fees that traditional full doc type loans – generally at least 0.1 -0.5% higher.
Non-Conforming lenders do all types of loans including
- Standard home loans
- Lines of credit
- Fixed loans
- Construction LOans
- Low Doc
- No Doc
- Credit Challenged Loans
- Farm, Commercial,& Business Loans
- Vehicle & Equipment Financing
Issues when looking at a non-conforming lender?
The interest rate will always be front of mind as well as fees both application and ongoing. It is also vital if there are any exit fees as some non-conforming lenders have quite steep exit fees as traditionally they don’t have the client for as long as a traditional lender and a lot of people use them on a shorter term basis.At Miller Finance we have access to a broad range of lenders and strive to find clients the most appropriate product that will help them meet their needs and objectives. Feel free to reach out if you need any help.
