Previously known as Non–Conforming loans, they are aimed at applicants who are regarded as high risk due to their inconsistent income streams or those who may have a poor credit history and/or facing personal setbacks, such as small business failure in the past, divorce or a relationship breakdown. Essentially, these applicants automatically become classified as a high-risk or a non-conforming borrower.
Specialist Lending is no different to traditional lending through the major banks. It’s all about ascertaining what has happened in the borrower’s circumstances and gauging whether the borrower is now in a better financial position. Some specialist lenders’ products are similar in that they also offer offset accounts (subject to them holding an ADI), choice of repayment frequency and type, as well as free access to re-draw facilities.
Lending principles are also similar to traditional banks, meaning, it boils down to serviceability, security and suitability of the loan product. Generally, their interest rates are also competitive. However, each applicant’s interest rate is appraised against the risk profile of the individual, and the overall loan to security ratio.
Paul is currently assisting more and more clients’ who fit this category because some banks are not able to provide the level of assistance required by these type of borrowers. The current economic climate, and the lack of innovation of products and services in response to changing needs and circumstances have prompted many to seek solutions outside traditional products and services.
If you fall into this category, or may have needs and requirements that are not able to be fully or satisfactorily fulfilled by your current lender, contact Paul today to discuss your options.