Friday, June 22, 2012

Who Can Benefit From Non-Conforming Home Loans?

People, who apply for non conforming home loans, are generally home owners who may be in unusual financial situations. Their income may be irregular because of the type of work they do, or they may simply want to refinance their mortgage or home loan, but do not qualify for a traditional refinance loan.

While these are typical cases for non conforming loans, there are other reasons why home owners will have to consider this type of financing.

* It is very tough to get a home loan after a bankruptcy.
* People with a bad credit history should not even bother applying for mortgages at mainstream lending institutions.
* Those self-employed with unusual or irregular income will most likely be rejected for a home loan. Banks are very reluctant to grant mortgages to borrowers who do not fit the classic customer profile, or who would qualify for non conforming loans. While these customers could actually be quite reliable in their payments, traditional financial institutions will simply refuse them.

Individuals who are in such a situation, and would like to buy property, should not despair. There are other financial services that are far more flexible than standard banks. These lenders will consider helping customers with unusual financial situations, because they have far better sources to get non conforming loans approved. Their applications are generally processed faster as well, so you will know much sooner if you can buy your dream home, or not.

While it is never polite to catalogue people, traditional banks often do. Mainstream lenders have strict lending criteria, and will consider the following borrowing situations as abnormal.' For that reason, they will reject the following cases, because they consider them candidates for non conforming home loans:

* Irregular income this category includes contract workers, self employed, seasonal workers, as well as people with other employment issues.
* Poor credit history or previous credit defaults e.g. some people may have had trouble paying back student loans, but are doing just fine now. They will be considered for non conforming loan as long as they have a satisfactory explanation.
* Debt consolidation victims It is easy to rack up a lot of debt during troubled times, such as unemployment. Once back into the workforce, they catch up on their consumer debt, and may actually do quite well.
* Discharged bankruptcy It does not mean that because you are being discharged from bankruptcy that banks will suddenly be open to negotiations. They will continue to view you as "high risk" for personal loans.
* Recipients of centrelink payments/benefits A number of non conforming lenders will consider centrelink payments as a valid source of income e.g. a single mother receiving parenting payments, family tax benefits and/ or maintenance. Check out several financial services before applying for a non conforming home loan. Look for a company that has a fast approval process, a number of different loans for you to choose from, a dedicated team of experts willing to help you, and access to a large number of specialist lenders. If you select the right non conforming loan provider, you will soon enjoy your new home.

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