While the majority of lending is completed by the major banks, they are not the only sources of lending. You can use alternatives. Below is a brief summary of the three types of lending:
The first is the traditional loan and the most common form of lending where all the major banks sit. This offers the lowest interest rates and costs of all the different loan types.
There are some great policies around now such as low–doc and parent guarantees but all require perfect credit histories.
Non-conforming lenders. They have a rate for risk philosophy and is usually more suited for people with credit issues. The lower the risk, the lower the rate and the deposit requirement will also vary.
However, Non-conforming lenders can be more flexible with different types of income.
The rarer Rent to Own or Vendor Finance solution. The basic principal is that you purchase the property from an investor over a period of time. You live in your home with the aim to refinance through to more conventional lenders. This type of lending has been around since the 1940’s but is not that common now.
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