Near Prime Home Loans
Near prime home loans are for borrowers who don’t quite meet the requirements of a banks lending criteria. It’s an alternative that often has many of the same benefits of a ‘Prime’ home loan.
Near Prime Loans are designed especially to assist a borrower in these circumstances listed below. If your circumstance is not listed please complete our Assessment Form and we will get back to you.
Types of Near Prime Loans that we can help you with:
Declined by Bank or Mortgage Insurer due to low credit score?
Finding out that your home loan has been declined is never a good feeling. Don’t despair – just because one bank has said “no deal” it doesn’t mean you should give up just yet.
Many Banks and non bank home lenders even have a minimum credit score between 650 > 700 for their applicants.
The mortgage insurance in particular have been almost ruthless in their scrutiny of applications. Knowing what lenders and the insurers are looking for is now vital to avoid having your loan declined. It has never been more important to use the services of an expert Non Conforming Lender.
We have Lenders that will look at each application and base the loan on merit. Our maximum loan ratio is up to 95% LVR on a purchase and 90% on a Refinance.
Cash Out including Business use and to pay out Tax debts.
Most Banks and other lenders will not allow cash out to pay tax debts. Furthermore releasing cash out of equity is considered by the banks to be very risky. We have funders that will allow unlimited cash out up to 90% of property value without controlling disbursements.
Non Genuine Savings.
Lenders like to see a borrowers’ history of savings. Normally the minimum is 3% – 5% of property value. Moreover they like to see this saved over a minimum of 3 months for loans above 85% of property Value.
The following types of savings are considered to be genuine savings.
- Savings held or accumulated over 3 months.
- Term deposits held for 3 months.
- Shares or managed funds held for 3 months.
- Some funders will consider rental history as part of genuine savings.
Our Funders will lend to 95% LVR without genuine savings.
Short Term Employed / On Probation / Unusual Occupations / Casual.
Just because you have unusual employment it doesn’t mean that your income isn’t secure. You can get a home loan if your job is secure. A Near Prime Lender bases his assessment on non standard employment.
Some of the Employment Sources we can help you with are listed below. Each type of worker is treated differently by the Lenders. In most cases we can go to 90% LVR however on strong supporting docs we can go to 95% LVR.
PAYG Contract Workers: Contractors can be sole traders with a registered ABN who invoice their employer or PAYG Contractors. An example of different types of contractors is listed below but is not limited to:
- Mining Contractors.
- IT Consultants.
- Construction Contractor.
- Freelance Journalists.
- Temp / Agency Worker.
Short term employed or permanent part time: Most lenders require that you be working in your job full time for six months or more.
Currently on Probation: We can assist even if you have been in your job on Probation and have worked in the same industry previously.
Casual Employment: You can borrow up to > 95% of the property value. If you are in a strong financial position and have been in your job for 6 months (exceptions available for under 6 months as long as been in same industry with 2 payslips >90% LVR)
A Near Prime Lender can base his assessment on non standard income sources. In most cases we can go to 90% LVR however on strong supporting docs we can go to 95% LVR.
Overtime, Commission and Bonuses: 100% acceptable if payment is consistent, ongoing and a condition of Employment.
Salary Sacrifice: Relates to untaxed salary sacrifice arrangements in sectors such as healthcare, social work or charity work. Excludes Salary sacrifice for Superannuation.
Centrelink: Regular government payments being received by applicants except for Job Seeker / Newstart. Payments must be ongoing for at least 5 years. Centrelink Pension (aged, invalid etc OK).
Family Benefits / Payments: Family assistance payment for dependent children (Part A, Part B are acceptable). Supplementary income such as rental, sickness and pharmaceutical can not be used.
Foster Care Payments: 100% accepted however counted as a dependent in servicing.
Income Protection and Workers Compensation: We can assist if ongoing payments are guaranteed until return to work or until retirement age.
Child Support: Only if a court order or a child support agency agreement exists. Private agreements are not acceptable.
Superannuation Income: Pensions or annuities 100% acceptable.
Share Dividend, Trust Beneficiaries, Inheritance or Interest Income: Ongoing income from shares (publicly listed companies only) or cash deposits acceptable. Capital gains on sale of assets is not acceptable. Need to show 2 years of evidence or last income tax return to confirm.
Allowances: If condition of Employment 100% acceptable for Shift, Housing or Car etc. Note: If car is supplied as fully maintained Company Car we allow $5,000 to be added to Gross Taxable Income.
Maternity Leave: Servicing can only be based on the lowest income being received during the leave period.
Home Loans for Older Borrowers
Funders have special lending policies to get a mortgage if you are an older borrower. Lenders have restrictions when it comes to lending to customers when the loan term exceeds their retirement age.
However, there are some considerations that may come into play.
- Retirement income: If you’re close to retirement age or already retired, lenders may consider your retirement income (such as pension, social security, investments) as part of your overall income when evaluating your ability to repay the loan.
- Exit Strategy: Is your ability to pay out your loan balance at retirement.
What are some common exit strategies?
Commonly accepted exit strategies for Non Conforming Lenders:
- Downsizing your property by selling your home and moving into a smaller home.
- Selling assets such as an investment properties.
- Make a lump sum payment from Superannuation after you retire.
Apartment / Unit Minimum size allowable
Minimum Size: Minimum size for an apartment is 40 square meters not including balcony or car park or 50 square meters including balcony and car space. If car space is on a separate title the mortgages are required to be taken over both titles. Funding available to 90% LVR on low rise (no more than 40 units in the same complex)
High Density or inner City Apartments: High density apartments (more than 40 + units in the one complex ) are restricted to a maximum loan of 75% of Purchase Price.
Mixed Use Zoning: Acceptable provided residence is on separate title to Commercial Property.
Number of Units / houses on 1 title: Up to 6 on one title allowed.
Funders have special lending policies for favorable purchase, and although there may be plenty of equity in the property they will limit gift to direct relatives. You can borrow up to 80% LVR of property value.
Seek Expert and Professional Advice.
If you still have doubts and want to obtain a Near Prime Home Loan you can seek help of an experienced mortgage broker. Go to Non Conforming Loans as they have experience in dealing with many lenders on a regular daily basis.