What is a non-conforming home loan?

Understanding non conforming home loans

What's a non-conforming loan?

A non-conforming home loan is simply a term used for home loans that don’t typically conform to the major banks' standard loan criteria. It is the opposite of what’s called a ‘prime’ home loan.

Who is a non-conforming loan for?

Non-conforming home loans are often pitched at home buyers who have a few dents in their credit record – or a lower than average credit score. They may also have a unique employment situation or record, that doesn't comply with a mainstream lender's acceptance criteria. 

Am I a non-conforming borrower?

Non-conforming isn’t a commonly used term. But 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 lender or mortgage broker may have referred to your home loan application as 'non-conforming'. It is also referred to as a ‘specialist’ home loan product.

If you’ve been identified as ‘non-conforming’ and rejected for a loan, it’s understandable you may feel getting a home loan might be out of reach, but there are options. Here at Pepper Money we understand that real life happens, and our flexible and individual approach has helped provide an alternative to borrowers since 2000. And that’s meant helping borrowers with the following circumstances achieve their home loan goals:

  • Self-employed - unable to show proof of income as you've recently started a business
  • Poor credit history - previously declared bankrupt or a history of credit defaults
  • Have an ATO debt you need to pay out
  • Have a solid income, but not much of a deposit
  • Have a deposit but it’s an inheritance or a gift
  • Have non-standard income - work part-time or are a contractor, or have irregular income as a business owner
  • Have multiple debts to consolidate such as personal loans, credit cards or business debt
  • You’re nearing retirement and the major lenders won’t have a bar of you

If you're having trouble because of your credit history, type of employment, or because your income type doesn't tick the right boxes, speak to Pepper Money.

While Pepper Money doesn’t offer low doc loans, we can help with our alternative documentation (Alt Doc) loans. As the name suggests, the paperwork you need to give us isn’t less than a standard loan, it’s just different. It’s an alternative, more flexible way of helping us to verify your income, rather than the usual 2 year’s tax returns and PAYG statements.

Whether you have full documentation or are interested to learn more about alternative documentation loans, talk to one of our Lending Specialists on 137 377 or enquire online. Alternatively speak to an accredited Pepper Money broker, they're there to help. 

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