Non-conforming home loans have come to be quite popular in Australia. These loans are offered by non-conforming lenders or those who are not linked with the banks. Although there are some borrowers who may feel that low-doc and non-conforming home loans are the same but the truth is that there is a thin line of difference. Both types of home loans are being offered by non-conforming lenders and both loans don't require proof of income but the major incompatibility lies in the segmentation of borrowers with reputation history problems. Low Doc loans are offered to habitancy who have a good reputation history while non-conforming home loans are like unsecured loans that are offered to habitancy with a reputation history problem.
Non-conforming home loans are basically mortgages that don't conform to the lender's acceptable underwriting criteria. An applicant who has a poor reputation history or who has not been in employment for long adequate to show a valid proof of income can get non-conforming home loans. Non-conforming home loans can also exceed 80% of the mortgage/security value. Lastly, the interest rate in a non-conforming loan is dependent on the how bad the reputation history of the borrower is.
The non-conforming home loan store in Australia is a billion store that is rapidly growing and the rate of increase has been estimated to be 40% per year. The non-conforming home loan store is mostly dominated by players like Ge, Bluestone, liberty Financial, and Pepper Homeloans. Someone else fact of non-conforming home loans is that they tend to generate a delinquency rate that is at least 10 times as compared to prime products or the acceptable home loans. The interest rate charged in non-conforming loans can also be in double-digits if the loan-to-value ratio is high enough.
A non-conforming home loan will always have a higher interest rate because the risk is much higher for the lenders. Giving a loan to a borrower with a bad reputation history is a high risk. If you apply for a non-conforming loan then you need to know that the whole of interest can go up to thousands of dollars while the life of this home loan. Even the repayment conditions imposed by the lenders are quite strict.
So if you are mental of going for a non-conforming loan then you need to weigh the pros and cons of this loan determined before taking a decision.
insight Non-Conforming Home LoansElectric Motor Repair Electric Motor Drives ADSL Router Wireless