Introduction
Are you having difficulty securing a traditional mortgage for your dream home? You’re not alone. Many Australians encounter obstacles when trying to obtain a home loan, such as low credit scores, unique property types, or a high debt-to-income ratio. However, there are alternative mortgage options available to help you achieve your goal of home ownership. In this blog post, we’ll guide you through exploring these options and provide practical tips and strategies for building your case for mortgage approval, no matter your financial situation.
Understanding Your Financial Situation
Getting approved for a traditional home loan is a daunting task, especially if you’re not familiar with the process. That’s why it’s important to understand your financial situation before you apply. Start by checking your credit score and history on the Equifax website. You’ll be provided with a snapshot of your creditworthiness and any factors that may be impacting it. You can also use them to identify errors or discrepancies on your credit report.
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According to a recent report from CommBank, having a high debt-to-income ratio is one of the main reasons people are denied mortgages.
What does a high debt to income ratio mean?
This means is that your monthly debt payments exceed your monthly income. To improve your chances of getting approved, it’s important to address any outstanding debts and increase your income. Financial experts recommend paying off your debts in full, organising debt consolidation at a lower monthly repayment rate, or negotiating a payment plan with your creditors.
As a veteran specialist mortgage broker, Kellie Lam explains, “Lenders want to see that you’re financially responsible and can afford to make your mortgage payments on time each month. Taking steps to improve your credit score first, and reducing your debt-to-income ratio can go a long way in helping you get approved for a mortgage. abacus can advise you in doing this, every step of the way”
Exploring Alternative Mortgage Options
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If you’re struggling to secure a traditional mortgage from a bank, a non-conforming home loan could be a viable option for you from abacus Home Loans. These home loans cater to borrowers who don’t meet the usual lending criteria, such as self-employed individuals or casual workers with irregular income. Non conforming lenders specialise in lending to people in these situations, whereas the bank will usually say no.
Below are some job roles that may require non-conforming home loans:
- Self-employed individuals
- Small business owners
- Freelancers and contractors
- Police & Firefighters.
- Casual or part-time workers
- Those with a limited credit history
- Non Residents
Finance options for those seeking non-conforming home loans:
- Low Doc Loans – these loans are designed for self-employed individuals who have limited documentation to support their income.
- Non-Resident Loans – these loans cater to non-Australian residents who want to purchase property in Australia.
- Bad Credit Loans – these loans are for borrowers with a poor credit history.
- Specialist Loans – these loans cater to those with unique properties or complex financial situations.
- It’s important to research and compare different lenders to find the best non-conforming home loan for your needs. Sites like CoreLogic, ANZ, Westpac, and St. George Bank can provide information and guidance on the process. Remember to carefully read the terms and conditions and seek professional advice if needed.
Creative Financing Options
Non-conforming home loans may come with risks, such as high interest rates and fees. However, there are great alternative finance option available to those who may not qualify for traditional mortgages.
Here are a few to consider in addition, to improve your position:
- Seller financing on part of the sale price, or owner financing can provide a solution for borrowers who are struggling to secure financing, With this option, the seller acts as the lender of part of the cost, and finances that cost directly. This can easily be managed by your solicitor.
- Rent-to-own agreements allow renters to rent a property for a set period of time with the option to purchase it at the end of the term. This can be a good option for those who are not yet in a position to qualify for a traditional mortgage.
- Shared equity or shared appreciation mortgages provide a portion of the down payment or mortgage payment, which reduces the amount of financing needed. In return, the lender receives a share of the equity or appreciation in the property.
- Down payment assistance programs, such as first home buyers grants can help borrowers with limited funds for a down payment. Some programs in Australia offer grants or forgivable loans that do not need to be repaid.
Remember to seek professional advice from a specialist mortgage broker like Abacus Finance. They’ll research and make the best decision for your individual circumstances.
Building Your Case For Mortgage Approval
Working with a specialist mortgage broker can make all the difference. While traditional lenders may not consider you a suitable candidate for a mortgage, Abacus Finance will. Specialist mortgage brokers have the knowledge and expertise to find alternative lenders that may be willing to work with you.
These brokers have access to a wider range of lenders and loan products that cater to individuals with unique financial circumstances. They can help you navigate the complex application process, provide advice on the right loan product for your needs, and negotiate with lenders on your behalf.
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As a bonus, many non-conforming mortgage brokers have established relationships with lenders that can result in more favorable loan terms and conditions.
According to Kellie Lam, CEO of non-conforming mortgage broker Abacus Finance, “Our clients come to us because they need a solution that is tailored to their individual needs. We take the time to understand their situation and work tirelessly to find a lender that will provide them with the best possible outcome.”
Overall, working with a non-conforming mortgage broker can save you time, money, and stress in the long run.
Conclusion
In conclusion, we hope this article has been informative and helpful in understanding your options if you can’t get approved for a traditional mortgage. At Abacus Finance, we know that navigating the world of mortgages can be confusing and overwhelming, but we’re here to help make the process as smooth as possible for you.
We pride ourselves on our expertise and experience in finding solutions that other mortgage brokers just can’t. We get 105 lenders bidding for your home loan! Our team is dedicated to helping you achieve your homeownership goals, regardless of your credit score or income level.
So if you’re ready to take the first step towards getting the mortgage you need, we invite you to connect with us today. Our help doesn’t cost you a cent and our team is ready to listen to your needs and work with you to find a tailored solution that suits your individual situation. Let us help you get on the path to homeownership.
Source: https://tholansonnha.com
Category: Finance
