There are plenty of times that banks cannot approve deals and that’s why we have good relationships with a range on non bank lenders.
The Bank Are Getting Tougher
In recent months we have seen the banks getting tougher.
They are declining deals today that they would have approved last year, and in a number of cases they might still approve today if presented to them correctly.
As mortgage brokers we will assess things to see why a bank may have declined a deal, to see if there is another way to present the deal to a bank or to use a non-bank lender if that is the best or only option. There are many reasons that a non-bank option may suits including;
- Unable to prove all of your income – low doc home loans
- Had some previous bad credit – bad credit home loans
- Mortgage arrears – home rescue
But many non-standard home loans are unique situations created by events in life.
The best way to approach this is to discuss your situation with us – and that costs nothing.
Generally non-bank options are more expensive and have a combination of higher interest rates and fees which often include an adviser fee. Once we understand what is required we will be able to give you a good idea of what the costs may be so there are no surprises.
Examples Of Recent Non-Bank Deals
There are many reasons why people might need money and when the bank says “NO” and it’s important to work with a mortgage broker that understands the issues and can therefore source finance that suits the need.
Here are some recent examples of deals that we have arranged with non-bank lenders;
Purchase of first home where short on deposit – this was a combination of a 1st and 2nd mortgage with two different non-bank lenders. The property was purchased in Helensville for $525,000 which was $10,000 below the valuation, and our clients had a deposit of $70,000. We arranged finance for them with a 1st mortgage of $420,000 at about 4.90% and a 2nd mortgage of $35,000 at 14.95% which equates to an overall interest rate of 5.69%
To complete a build where bank would not advance any more – our clients were building two houses to be resold and they exhausted the funding that their main bank were prepared to offer. We arranged bridging finance of $20,000 for 6-months at 10.95% so they could complete the houses and get them on the market.
Purchase of new home for non-resident – our client had committed to a new house being built and upon completion the bank criteria had changed and they would no longer fund the purchase. We arranged a mortgage of $459,000 at 8.00% so our client could complete the purchase.
Buying a franchise business and debt consolidation – our clients wanted to purchase a franchise business and get rid of some credit card debt. We arranged a loan of $115,000 at 17.95% which allowed them to get started in business and while quite a high interest rate, it also allowed them to reduce the credit card interest they were paying. This is a short-term solution until they have proven income from the business.
To pay mortgage arrears and a family debt – our clients were behind on their ASB mortgage which meant they were unable to get the lower fixed rates and were being charged default interest and they also had a family debt which they had not been able to pay back. We arranged a loan for $48,000 at 17.95% which allowed then to pay the mortgage arrears and get onto the lower fixed rates, meaning overall they were paying less.
Purchase of a new home while in temporary employment – our client was a a short-term contract and had some previous mortgage arrears when between contracts; therefore her bank would bank would not provide a home loan to her. We sourced a mortgage of $900,000 at 7.50% which enabled her to buy the new home.
Purchase a house from family with no deposit – our clients had the opportunity to purchase a house in Rotorua off family for below valuation, but they had no deposit. We managed to arrange a mortgage of $300,000 through a non-bank lender at 7.95% so they could complete the purchase.
Required money to pay IRD debt – our client had debt to the IRD that needed to be paid. We arranged a loan as a 2nd mortgage of $70,000 at 16.95% so they could clear the IRD arrears and ensure that the business could keep trading.
Required debt consolidation and had run out of savings – our client was out of work and it had taken longer than expected to find another role; hence the credit cards had hit the limits and they needed money to keep paying the mortgage. We arranged a 2nd mortgage of $120,000 at 18.25% to get them through until they could find work and therefore do a mortgage top-up to clear this.
Of course we will always consider a deal and see if a bank is likely to accept it.
Contact Us About Your Situation
We take the time to understand your requirements.
There are many reasons for using a non-bank lender and any discussions that you have will be kept in confidence.
Contact us today to discuss your situation: Freephone: 0800 100 939