Navigating Home Loans: How Non-Bank Lending Can Help You Get Ahead
February 13, 2025 at 10:18 AM
Navigating Home Loans: How Non-Bank Lending Can Help You Get Ahead
What is Non-Bank Lending?
Non-bank lenders provide home loans to borrowers who may not yet qualify for a traditional bank mortgage. They can be a stepping stone for those looking to build or rebuild their financial standing before transitioning back to a mainstream bank.
Here’s how non-bank loans can help in different situations:
1. Self-Employed? You Have More Options Than You Think
If you run your own business, securing a home loan through a bank can be tough—especially if you don’t have two years of financials or your taxable income doesn’t reflect your actual earnings.
With non-bank lenders, you may qualify for a home loan with:
- As little as one year in business.
- The ability to use business cash flow instead of standard financial statements.
- Options to cash out equity to grow your business.
This means you don’t have to wait years to get bank-ready—you can buy a home now while building your financial profile.
2. Credit Challenges? You Still Have a Path to Home Ownership
Life happens, and sometimes credit issues arise. Whether it’s a past default, late payments, or financial setbacks, banks often turn away borrowers with imperfect credit histories.
Non-bank lenders look at your overall financial situation, not just your credit score. They may help if:
- You have past defaults or credit issues but have since stabilised.
- You have multiple debts that could be consolidated into one lower repayment.
- You’ve recently been through a life event (job change, divorce, or temporary financial hardship).
3. Looking to Buy with a Smaller Deposit?
Saving a 20% deposit is one of the biggest barriers to homeownership. While banks have strict deposit requirements, non-bank lenders offer options that may allow you to buy with as little as 10% or even 5% deposit in some cases.
Additionally, non-genuine savings (such as gifts, bonuses, or non-traditional deposit sources) may be acceptable, helping you enter the market sooner.
4. Need to Refinance? You Might Be Paying Too Much
If you're struggling with high repayments, or you’re on a high-interest private or construction loan, refinancing with a non-bank lender could reduce your costs.
- Dollar-for-dollar refinancing allows you to switch lenders at the same loan balance, often at a better rate.
- If your property value has dropped, but you were originally approved at 80% LVR, you may still qualify for a refinance without extra hurdles.
- Investors looking to refinance multiple properties may find more flexible lending solutions compared to banks.
5. Buying an Investment Property? Investors Are Coming Back
With more properties on the market, investors are starting to take advantage of new opportunities. If you're looking to purchase, non-bank lenders offer:
- High LVR lending for investors (subject to availability).
- Loans under flexible lending rules for properties owned under trusts or investment companies.
- Alternative income verification methods for investors with complex financials.
A Smart Strategy: Use Non-Bank Lending as a Stepping Stone
Non-bank lending isn’t forever—it’s a short-term solution to help borrowers get into a home, improve their financial situation, and eventually refinance back to a bank. Many clients start with a non-bank lender for 2-3 years, then transition to a traditional mortgage once they meet bank criteria.
Is a Non-Bank Home Loan Right for You?
If you’re struggling to get bank approval or looking for more flexible lending solutions, non-bank lending could be the key to securing your home sooner.
✅ Self-employed with limited financial history?
✅ Have past credit issues but a stable income?
✅ Need a loan with a lower deposit?
✅ Want to refinance to reduce repayments?
✅ Looking to grow your investment portfolio?
If any of these sound like you, it’s worth exploring your options.
Next Steps: Talk to a Specialist
Non-bank lending isn't about risk—it's about opportunity. With the right strategy, you can secure a loan today and work towards a long-term plan to transition back to a bank when you’re ready.
If you're unsure whether a non-bank home loan is right for you, talk to a mortgage advisor who can help you explore your options and guide you through the process.
The key takeaway? You don’t have to wait. If you're ready to buy, refinance, or invest, there are options available right now.