What are non banks?
Over the past few years we have seen the options outside the banks increase substantially. Finance companies that operate in the mortgage space are able to offer more flexibility in their rule books. The main three which offer up to thirty year terms have been Liberty, Resimac and Bluestone. There are many more which offer shorter terms but without any focus on the current income.
What do they offer?
Basically there are some distinct areas where non bank finance companies operate.
Bad Credit. For clients who have had challenges in life which has led them to be temporarily messy with finances and led to a bad credit history.
A few short term debts and a low deposit can also still mean a home. However a bigger on focus on income is used to balance the risk.
For shorter term home loans which maybe required to bridge from point A to B, loans are available without any focus on income with two caveats.
1. A suitable exit strategy, as in how will the debt be cleared in the next couple of years.
2. Decent equity or deposit.
Costs?
At this stage you can expect around .8% to 2% higher than normal bank rates, if income is available. For bridging with no income you can expect about 4% – 6% higher than normal bank rates.
