Specialist Home Loans
A specialist home loan is simply a term used for home loans that don’t typically conform to the standard home loan criteria of the major banks. It is the opposite of what’s called a prime home loan. If you’ve ever been declined for a home loan because you're self-employed and don't have the latest financial records or have a poor credit history, your Mortgage Broker may have referred to your home loan application as being non-conforming or specialist.
Whilst lenders don’t offer low documentation home loans, there are many non-bank lenders that can help with alternative documentation home loans. As the name suggests, the paperwork you need to provide isn’t less than a standard home loan, it’s just different. It’s an alternative, more flexible way for non-bank lenders to verify your income, rather than the usual two year’s worth of business and individual income tax returns.
If you're having trouble because of your credit history, type of employment, or because your income type doesn't tick the right boxes, a specialist home loan could be just the right solution for you. If you would like to get a better idea of your borrowing power and what your likely repayments might be, try our Borrowing Power Calculator and Loan Repayment Calculator.
Benefits of using a non-bank lender
Having a home loan application turned down by a major bank happens to thousands of people every year. If it happens to you, don’t be discouraged. Non-bank lenders recognise that everyone's circumstances are different and they don't believe in a one size fits all approach.
Perhaps you don't have up to date tax returns, because you’re self-employed. Or perhaps you’ve filed for bankruptcy in the past. Two very different sets of circumstances that may not fit a traditional lender’s loan suitability and credit assessment criteria. But with non-bank lenders, your application is assessed individually by an underwriter against their loan suitability and credit assessment criteria. This means that your application will be assessed on its individual merits, by a person, not simply judged against a credit score from a computer.
When it comes to your home loan application, if you have defaults or judgements against your name, non-bank lenders can still consider your application. You may still be eligible for a home loan that suits your needs, provided that your application complies with the lenders loan suitability criteria. Non-bank lenders are more concerned about understanding why the defaults and judgements occurred, your current means of income, your ongoing ability to repay the loan without incurring hardship, where the property is located and the size of your deposit.
When should I use a specialist home loan?
Non-bank lenders provide very competitive specialist home loan solutions. This type of lender will commonly assist borrowers with the following circumstances:
You have a solid income, but not much of a deposit
You have a deposit, but it’s an inheritance or a gift
Your business has an ATO tax debt that needs to be paid out
You receive irregular or non standard income because you’re a business owner
Your latest financials are not ready at the time of lodging the home loan application
You’ve recently become self-employed and you’re unable to show proof of income
You’ve legally reduced the profitability of your business to reduce your tax bill
You’ve previously declared bankruptcy or had a history of credit defaults
You’ve got multiple debts to consolidate such as personal loans, credit cards or vehicle loans
You’re nearing retirement and the major lenders don’t have an appetite to assist you
At My Finance Consultants we believe everyone has the right to achieve their financial goals, we make it our mission to offer alternative lending options when it is appropriate. If the major banks have recently declined your home loan application, speak to your trusted Mortgage Broker about how they might be able to assist you.
Why choose My Finance Consultants?
We do all of the legwork
We compare hundreds of home loan options from a wide choice of lenders, including the big banks and specialist lenders. We handle every step, having a thorough process in place to qualify you with our lender panel to find the most suitable lending options for you. We organise all of the required paperwork, order lender valuations, liaise with your real estate agent and conveyancer for a smooth transition to settlement.
We provide a convenient service
Mortgage Brokers save you the time and hassle involved in applying for a home loan - from application through to settlement. We'll meet at a time and place that best suits you, to establish your needs and preferences. We then do all the research and running around to manage every step of the application process. This saves you shopping around - as we do it all on your behalf.
We provide professional advice
We are fully trained, and accredited with every lender we represent. We are full members of the Mortgage & Finance Association of Australia and we have many years of industry experience. We also have a number of consumer protection initiatives in place to protect you - our valued clients. As mortgage professionals, we seek to guide you through the lending process to help you make better financial decisions.
We help you select the right home loan
Our first priority is helping you select the home loan that’s right for you, now and into the future. Your Mortgage Broker will save you the time and hassle associated with shopping around for a home loan, they will also guide you through the home lending process to help you make better choices with your personal finances.
We will always try to save you money
We use comprehensive software which helps us pinpoint the most suitable and competitive home loan for you. Typically, our service can help cut the current interest rate you are paying as well as reduce your fees and monthly repayments. Using a Mortgage Broker is also a great way to figure out a strategy to maximise your borrowing power.
We don’t charge you a fee for our service
There is no charge to you for our services because the lender pays us a commission once your loan has settled. We do charge a commitment fee for home loan pre-approval applications, however we will refund this to you upon settlement of your home loan. We will always aim to provide a trusted, friendly and professional mortgage broking service.
Our clients have been saying some great things about us!
Whatever your goals, a competitive home loan will get you there faster!
Whether you're a first home buyer, upgrading to your next home, getting into property investment, or wanting to refinance and pay off your existing home loan sooner, we can help you make the right decisions and stay on top - whatever your home loan needs.
We'll compare more than 40 leading banks and lenders, as well as hundreds of home loan options to find one that's right for you. No matter what kind of mortgage you're interested in, you'll enjoy expert home buying and lending advice from a Mortgage Broker you can trust.
Our industry knowledge and sophisticated mortgage software allows us to assess and compare the hundreds of home loans that are available in the marketplace, we will calculate your borrowing capacity and identify which lenders you will qualify with.
If you're ready to start your home loan journey, give our friendly team a call on 1300 381 955 or visit the Book Appointment section on our website.
FAQs
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Specialist home loans are typically provided by non-bank lenders. Non-bank lenders are able to fulfil the need for specialist lending because the major banks don’t have an appetite for this type of lending.
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The key success factors for a specialist home loan are to:
Keep an open mind regarding alternative loan options
Focus on whether you can afford the repayments every month rather than the interest rate
Providing the correct documentation requested by the specific lender
Having a supportive accountant who is willing to confirm your income declaration
Demonstrate good financial conduct before and after you obtain the loan
Accurately explain your situation to us, so we can position this with the lender in a way that will help you to get approved
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A credit impairment can refer to any of the following situations:
Arrears or missed loan repayments, including credit cards
Defaults on bills such as phone bills, utility bills, council and strata bills
Court judgements or bankruptcy filings in your name, or a company you were a director of
These items can be identified on your credit report, which we run for most self-employed clients or those who indicate that they may have a bad credit history.
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A specialist home loan can be used the same way as any normal home loan. This includes the following:
Purchasing a home or investment property
Conducting renovations
Investing in shares or other assets
Purchasing a motor vehicle
Consolidating other loans to make your repayments more manageable
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Common methods of income verification include the following:
Last 6 to 12 months business activity statements
Last 6 to 12 months business bank account transaction history
A signed document declaring your self-employed income
A signed document from your accountant verifying your self-employed income
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A self-employed income declaration is where you self-declare your own income in a formal document to the lender. This income is then used for servicing as long as your accountant is willing to confirm this in a corresponding verification document. Your home loan application will still need to meet the lender’s credit policy criteria.
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An accountant’s income verification is a separate document or declaration that confirms the income that you earn. Usually this statement will match identically the income you have declared or, at a minimum, advise that you can afford the loan repayments. The letter will also advise the number of years they have been your accountant, their professional membership and that there are no conflicts of interest in making the declaration.
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Yes. The interest rates on a specialist loan are usually 1% to 3% higher depending on the purpose of the loan, the loan to value ratio, and the degree of credit impairment. The more risk presented to the lender, the higher the applicable interest rate.
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Yes. In addition to a higher interest rate, specialist lenders will also charge a higher establishment fee than a normal bank. This fee is usually 1% to 1.5% of the loan amount, it is commonly referred to as a risk fee. Some lenders will allow this fee to be capitalised into the loan amount, so that you don’t need to pay the risk fee out of your own pocket.
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Yes. Some specialist lenders will call you to ensure that you understand the implications of your home loan application and to verify that the details are correct. Your accountant may also be called to verify the same. Apart from this, the loan process is mostly the same as any other full documentation home loan application.
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Yes. It’s important to keep in mind that you’re not stuck with a specialist home loan forever. You will be able to refinance out of a specialist home loan as long as you can demonstrate the following:
Good conduct on your home loan
Your credit file has been remediated
Your income is sufficient to service the home loan under full documentation lending requirements
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Yes. There are two common types of restrictions, these include the following:
The greater the credit impairment, the lower the allowable loan to value ratio by the lender. This allows the lender to manage the risk associated with providing the home loan.
Normally a specialist home loan cannot be used for the purposes of construction or to purchase vacant land. Postcode restrictions may also apply where the lender will only accept properties in metropolitan postcodes or in towns with a minimum population.