What is a non-conforming home loan?
Not everyone fits the standard lending criteria identified by the banks. If you’ve had a credit issue, changed jobs recently or don’t have traditional income documentation, you might find it harder to get approved for a home loan with a mainstream lender. That’s where non-conforming home loans come in.
These loans are designed for people with unique financial situations who may not meet the requirements of traditional lending.
What non-conforming means
A non-conforming home loan is a type of loan offered to borrowers who don’t meet the standard lending criteria. This could be due to:
- A lower credit score
- Irregular income or self-employment
- Past defaults or missed repayments
- Limited financial documentation
- Bankruptcy or debt agreements
These loans are assessed differently and may offer more flexibility in how your financial situation is considered.
Who non-conforming loans may suit
Non-conforming loans may be suitable for people who:
- Are self-employed and don’t have full financials
- Have experienced financial hardship in the past
- Are recovering from bankruptcy or credit impairment
- Have recently started a new job or changed industries
- Receive income from multiple sources
Every lender has different criteria, so it’s important to understand what’s required before applying.
Things to keep in mind
While non-conforming loans can offer more flexibility, they may also come with:
- Higher interest rates
- Additional fees
- Stricter repayment conditions
It’s important to compare your options and understand the full cost of the loan over time so you can decide if the loan meets your needs.
We're here to help
At Pepper Money, we specialise in real-life lending. We understand that your financial story is more than just a credit score. Our team looks at your full situation to see how we can help.
To learn more, visit our home loans page or speak with a lending specialist on 137 377.
Contributor | Neil Culkin, Head of Credit and Settlements
Neil has a 20-year career in credit provision. At Pepper Money, he oversees the underwriting and credit control of all consumer finance loan applications. He is also responsible for updating lending policies and guidelines. Read more.
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