Non-Conforming Loans
Some things in life can undoubtedly catch us off guard when we least expect them. When it comes to money, a setback can be catastrophic. For instance, many first-time home buyers can be dealt a cruel blow by mortgage lenders. Years of hard work can be halted by minor dents in a credit score or, even worse, not having any credit history. Non-conforming lenders can help. If you haven’t heard of non-conforming loans, they are loans designed for people with bad or low credit scores. This doesn’t mean that you’re bad with credit; it could simply mean that you haven’t taken out enough and, therefore, have a low rating. This can hold many people back, whether a personal loan, business loan or mortgage.
Non- conforming loans can be an excellent solution for someone struggling to obtain credit. But what non-conforming lenders can you trust? How much will it cost to pay back a non-conforming loan compared to a conforming loan? Will you be able to afford the payments?
At Universal Finance, we specialise in non-conforming loans for individuals struggling with their credit, having no credit, or having a less structured income. We always check an applicant for a non-conforming loan by carefully assessing their DTI (debt to income ratio) to make sure the repayments for their non-conforming loan are more than manageable for them. Obtaining a loan from Universal Finance will also ensure that your credit rating will increase for future loans or mortgages.
Benefits of a non-conforming loan
There are many advantages to taking out a non-conforming loan. They are designed to help people who might not qualify for help elsewhere. They are great for first-time home buyers, self-employed or individuals in unconventional employment, and people who may struggle to obtain credit for various reasons.
Non-conforming loans offer flexible terms because there is no requirement to conform to the guidelines that other major lenders do. This means that although the interest might be higher, you can pay back the loan at the pace that fits your circumstances.
Another major benefit of using a non-conforming lender is that it can allow individuals to build up their credit scores. If you have been denied credit elsewhere, a non-conforming loan might be the right choice so that you can finally start to build up your credit score for future credit applications. The major drawback when applying for a loan is that applicants will often be denied when they haven’t previously taken out loans. So, where do you start? A non-conforming lender can be the best option to get you on the right track for future loans or mortgages. If you’re struggling with credit, then why not talk to Universal Finance today?
If you are applying for a non-conforming mortgage, then it often requires a much smaller down payment. This will give you a leg up in the property market and can knock off years of saving that an ordinary mortgage would usually require.
Non-conforming mortgages
In order to qualify for a mortgage from a bank or major money lender, you must go through rigorous checks. On top of this, there is a requirement for a large down payment that many can't afford. With a non-conforming mortgage, it is possible to purchase a property and avoid the anxiety of meeting the usual criteria. Credit checks for a non-conforming mortgage are much less strict, and it is even possible to acquire one with a 0% down payment. Universal Finance offers great advice if this sounds like something that might be right for you.
Non-conforming business loan
If you are a new business owner or looking to start a business and need some financial help, it may be difficult to get a loan from a bank or major money lender, so a non-conforming business loan might be the right choice for you. Non-conforming lenders, such as Universal Finance understand how difficult it can be to acquire credit in the initial stages of your business and are willing to support customers throughout those crucial steps.
Is a non-conforming loan right for you?
If you have no credit history or you have one with a few marks against your name, then considering a non-conforming loan, might be the best way to go. A non-conforming loan can help you get back on your feet by increasing your credit score and giving you the financial support you need. Whether it is a non-conforming business loan or a non-conforming mortgage, this option might be a perfect choice.
Non-conforming loans are popular for first-time home buyers as they don’t require the same standards attached to a loan from banks and sometimes require little to no down payment. This means you can jump onto the property ladder sooner rather than later.
A non-conforming loan can also be the right choice if you are a new Australian citizen looking for all kinds of financial support.
If you don’t have a perfect credit score and want to improve it, start a business, buy a home, or need extra financial support, then considering a non-conforming loan with Universal Finance, could be the right choice for you.
FAQs
What’s the difference between conforming and non-conforming loans?
A conforming loan is a loanthat is measured on your credit score and strictly adheres to specificcriteria. A non-conforming loan is a loan that does not require to match thesame criteria as banks and other major money lenders. Non-conforming loans areperfect for people who are self-employed or have previously been denied creditapplications, are new residents to Australia, frequently change jobs, orcurrently have a lot of debt. Non-conforming loans are designed to help peoplewho would otherwise struggle without the option of credit, whether it is apersonal loan or a non-conforming mortgage or even a business loan. For anyadvice or queries on non-conforming loans, contact Universal Finance today.
What does non-conforming mean?
Simply put, non-conforming isa term used for a type of borrowing that does not follow the same process asmainstream lenders such as banks. This allows non-conforming lenders to helpclients who may not meet the standards for a normal loan. Non-conforminglenders are not deposit-taking organisations, which means they can be morerelaxed with each applicant.
What is a non-conforming loan in Australia?
A non-conforming loan is aloan that doesn’t require the same results that a bank might when applying for credit.They are designed for people with a few dents in their credit score or with nocredit history. This can allow Australian citizens to apply for credit whomight be refused elsewhere.
Is a non-conforming loan the same as a non-conventional loan?
This is a commonmistake. Non-conforming loans and non-conventional loans are similar, but theyare different. A non-conventional loan is a loan aimed at people with lowincomes, whereas a non-conforming loan is from a lender that is a separateinstitution from a bank or other major lenders. This means that anon-conforming loan can be obtained by someone with an irregular income orflaws in their credit history. Non-conforming lenders are not deposit-takingorganisations, so they can be more flexible with the requirements when awardinga loan.
What is a non-conforming loan’s normal limit?
Depending on the circumstances, the limit of a non-conforming loan canvary. It is possible to get a non-conforming mortgage or a non-conformingbusiness loan, which might give you a good idea of just how much it is possibleto borrow using a non-conforming lender. The limit of an application willdepend entirely on the circumstances of the borrower. We will assess whether wethink the figure is realistic and whether the borrower will be able to pay backthe money.
Do non-conforming loans have higher interest rates?
The short answer is yes. A non-conformingloan is for somebody who might not qualify for a conforming loan from a majormoney lender or bank. This is often a result of someone not having a strongenough credit score or no credit record at all. As a result, the non-conforminglender is taking a much higher risk. To counteract this, the interest rateswill usually be higher.
What can I get a non-conforming loan for?
It is possible to get a non-conforming loanfor just about anything. Often, first-time home buyers require a non-conformingloan because they haven’t built up a credit record yet. If someone doesn’t havea large deposit, equity, or a guarantor, then a non-conforming loan is thecorrect choice. However, a non-conforming loan is not just for home buyers; itcan help anybody who might not be a conventional customer for a loan from amajor bank, such as a new business owner, a new Australian resident, or someonewho is self-employed.