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Why it’s a good idea to consider a non-bank lender

When you think about getting a mortgage, it’s generally a bank that first springs to mind as your lender. But did you know that there are a number of non-banks who also lend on mortgages?

Non-bank lending institutions offer loans but they don’t have a banking license. This means they are also not held to the same criteria that banks are, which means they are often a lot more flexible in their lending, whereas banks are governed by a strict set of rules.


Non-banks are a great option for those people who fall into niches that banks tend to avoid or consider to be ‘higher risk’. This could include those who are self-employed, have been rejected by other lenders, or have bad credit histories.


Generally non-bank lenders do have a slightly higher interest rate than bank lenders. Many non-banks only lend money, they don’t accept deposits, which means they have to secure external funding. Often this funding is at a slightly higher rate than their banking counterparts, which then gets passed on to the borrower via interest rates.

It’s definitely a good idea to consider a non-bank, especially if your personal circumstances mean you sit outside of the normal banking criteria. While you may pay slightly higher, it also means that you may qualify for a loan which you may not have via a bank.

It is important to choose the right non-bank lender however, and this is where it’s a good idea to use a mortgage advisor. We work with a number of fantastic non-bank lenders…. And we also know who to avoid!

If you would like to find out more about non-bank lenders, or talk about your current situation, then our mortgage advisors at Better Choice Home Loans are happy to help. We can assess your situation, and then do the math to work out which lender you may qualify with and what you can afford to spend. Get in touch with our mortgage brokers today.



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