What to do when your bank says no: Non-Bank Lenders ????

When purchasing a property it's important to know that banks aren't your only option for securing finance. Depending on your situation, you might consider a non-bank. This is generally reserved for, developments, commercial acquisitions, or investments. Banks are often seen as more reliable, offering good interest rates, straightforward application processes, and strong customer service. However, they operate under strict Reserve Bank regulations, which can limit flexibility and make it harder for borrowers who don't meet specific criteria.

On the other hand, non-bank lenders are privately owned institutions that provide an alternative to traditional banks. They often offer more flexible lending conditions. However, generally speaking, the rates are higher, and there are often lending fees, making them suitable for borrowers who may not meet bank criteria and want fewer lending barriers. The loan terms are generally shorter, as the non-banks look at how you will repay your debt based on your exit strategy to refinance/close/sell before the end of the loan term. Though non-bank lenders do not hold a banking license, they are regulated by consumer credit governing bodies, providing a viable option for those who struggle with conventional lending requirements.

Each lender type has its pros and cons. Banks are well-established and trusted, offering a sense of security and familiarity to customers who may already use them for everyday banking. However, their strict lending criteria and impersonal nature can make the process feel rigid and challenging. Non-bank lenders, by contrast, provide competitive rates and cater to those unable to secure traditional loans.

Choosing the right lender is a crucial step in your property journey, and each option comes with its own set of benefits and challenges. To ensure you make the best decision for your unique circumstances, it's always wise to seek advice from your trusted mortgage adviser. If this sounds like an option you or anyone you know would like to explore for your loan, please don’t hesitate to get in contact with us to discuss further.

Cheers,

Cam

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[email protected]

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