Buying a home is one of the most significant investments you will ever make. Luckily, many mortgage brokers can help you arrange finance with non-bank lenders in New Zealand.
Non-bank lenders are financial institutions that offer credit and loans but do not hold a New Zealand banking licence. They are regulated to comply with rigorous lending standards and regulations. For more information about the non bank lenders NZ, click here.
Why choose a non-bank lender?
In a world where lending restrictions are tightening, many first-home buyers must choose alternative mortgage solutions. It is where non-bank lenders come in.
They are an alternative option to mainstream banks and help drive competition within the New Zealand mortgage industry, which can give you more options and choices. Non-bank lenders offer a range of loans but generally fall into two categories: mortgages and short-term lending.
Choosing a non-bank lender can be great if a central bank has declined you due to a credit blip or has found it challenging to obtain a mortgage due to other circumstances. Non-banks can offer a more flexible approach to lending and often have loan products catering to self-employed people battling redundancy or having experienced relationship breakdowns.
Non-bank lenders are also known for their streamlined application processes and quick approvals. It makes them a preferred choice for borrowers seeking a hassle-free borrowing experience.
Low-deposit home loans
There is a growing interest in alternative finance because of rising house prices, tighter mortgage lending restrictions, and an overcautious approach from the big banks. It includes non-bank lender funding accessed via mortgage brokers and finance companies.
A low-deposit home loan can be obtained through many lenders, most of which are non-bank finance companies. This type of lending is known for its flexibility and faster approval processes. They are more willing to accept a range of income sources and are more likely to consider your capacity to service the mortgage based on declared expenses, income and net assets.
Self-employed home loans
Home loan approvals for self-employed borrowers have become more challenging since the housing market downturn. Lenders seek evidence that a borrower’s income is steady and sustainable, which can be difficult when borrowers cannot provide W-2 forms or two years of tax returns.
Self-employed borrowers should prepare for the mortgage application process by gathering all business financial records and ensuring they are accurate. Applicants should also try to boost their down payment and increase credit scores to improve their chances of getting mortgage approval.
Self-employed borrowers should shop around for a lender that offers a non-conforming mortgage loan program and compare several different interest rates. Some lenders provide “bank statement” loans, allowing borrowers to qualify based on 12-24 months of their business and personal bank statements, and may not require any tax returns. It is an excellent option for borrowers who cannot qualify for a conventional or government mortgage. For more information about the non bank lenders NZ, click here.
Non-bank lenders in New Zealand play a valuable role in our financial system. They provide borrowers with lending solutions that may not fit the strict criteria set out by central banks. Many Kiwis have been turned down for home loans by big banks, who can now benefit from the services of these alternative lenders.
These non-bank mortgage providers have increased in popularity over the past few years as significant banks face tighter credit standards and high loan-to-value ratio (LVR) restrictions. In addition to mortgages, non-bank lenders also offer finance for cars, business purchases and self-managed super funds.
While the Reserve Bank does not regulate these non-bank lenders, they are subject to the same lender responsibility principles. It means that they must make reasonable enquiries to ensure the borrower can repay their debts and that the loan will not cause them or anyone else significant hardship. For more information about the non bank lenders NZ, click here.