Whether you’re planning to buy your first home or a new investment property, you might assume that your only option for a home loan is to go to a bank. However, non-bank lending can be a more viable alternative than you might think.
Non-bank lenders have helped increase competition in the mortgage industry and have given homebuyers more options when it comes to getting the right loan for your needs.
What Is A Non-Bank Lender?
The term ‘non-bank lending’ refers to any lender who provides finance but isn’t a traditional, registered bank such as ANZ, ASB, BNZ and many more.
The Benefits of Getting a Home Loan From a Non-Bank Lender
Many non-bank lenders are well-established institutions. Non-bank lending can even offer you advantages over taking out a home loan through a bank. These benefits include:
Start-Up And Business Friendly
Banks often refer business owners to a specific business banking department, whose role is to understand your company and provide you with the lending you require. However many of these business bankers often end up being more a hindrance than a help.
It’s not uncommon for bankers to ask for business financials, budgets, projections and plans – information that’s not always available to you as the client, when you need it. Platinum Mortgages can help you draw up a suitable plan, to get approved for the loan you need for your business.
More Flexible Criteria
If your credit is average or poor and you have or know that you would be rejected for a home loan by a bank, non-bank lending may be a great alternative. Non-bank home loans usually have less restrictive financial criteria for potential borrowers. This also makes them useful if you cannot immediately demonstrate to a bank that you have the income level they demand.
If you have a default on your credit report, a bank will often dismiss you as a bad credit risk and decline your application outright. An experienced non-bank broker, on the other hand, will take the time to understand your problem and present a plan to your lender to get your loan approved.
Banks usually require a deposit of 20% on a home loan. As house prices in New Zealand continue to rise, these deposit requirements mean that getting onto the property ladder can seem like an impossible dream for many young, first-time home buyers, new immigrants, and anyone who has suffered a recent loss in equity.
However, the competition between banks and non-bank lenders and the greater flexibility offered by non-bank lending, means that they usually have lower deposit requirements than banks.
As a result, non-bank lenders have made home loans far more accessible for first-time buyers and others who may be turned away from traditional bank loans.
Because they’re subject to less regulation than a bank, non-bank lenders can offer more personalised customer service. Many focus on a niche product rather than a range of different services as well. This focus means that they often have specialist knowledge about a particular area, like the housing market.
Choosing non-bank lending for your home loan means that your Mortgage Adviser can often guide you through a more comprehensive array of options than you might get at a bank. Their expertise can help connect you with the best mortgage for your unique situation.
Buying a home can be one of the most significant investments you ever make. A Mortgage Broker from Platinum Mortgages, can give you expert advice on non-bank lending and help you find the best home loan for your needs. Get in touch with us at 0800 536 346.