loading live map...hang in there
CLOSE
Non-Conforming Loan - Non-Conventional Way to Your Financial Need
25 Sep 2019
Description

You are planning for a real estate project and to complete the project you are planning to apply for a loan. It’s always better to do some homework before applying for the loan. Everyone doesn’t fulfill the required criteria for getting a loan from a conventional financial institution. You must assess your creditworthiness at first to understand if you fall under a conforming or non-conforming borrower. 

Conforming v/s non conforming loan :

Conforming loans come under conventional mortgage loans that public banks or other financial institutions offer to their customers and follow some strict guidelines. Conforming loans have some limitation for granting the loan amount. You must have proper documentation and credit ratings to become eligible for this kind of loan.

Non conforming loans are not like conforming loans and have much higher loan limits. Non-conforming loans are also known as no bank loan.  Non conforming loans do not meet criteria like - creditworthiness, documentation status, financial standing etc for their customers. A bankrupt person may also apply for the non-conforming loan.

Who are the lenders? :

Typical banks do not come under any non-conforming lender’s umbrella. There are many private financial institutions who offer such kinds of loans to customers. They don’t follow any strict rules and regulations like a bank. 

Types of non-conforming loan: 

A non-conforming loan can be a commercial or residential one. One can apply for big commercial or retail projects like the Theatre Park, gas station or medical premises, etc. It’s also known as a jumbo loan.   Residential non-conforming loans are most popular in the Real estate category.  A large portion of real estate is only eligible for such kind of loan for their nature of business.  Non conforming loans can be secured or unsecured.  Unsecured personal loans or secured home loans come under this category.

Are you the right borrower for non Conforming loans?

If you are a resident of the state and more than 18 years of age, you can apply for a non-conforming loan.  You may be self-employed or unemployed or going to retire in a few days, you are still eligible for the loan.  Your credit history, debt- income ratios are not important here. They will assess your worthiness based upon their criteria and for that, you should be ready for the extensive paperwork.

Advantages you will enjoy:

You may have a poor credit rating or you are unemployed now. It doesn’t mean you can’t apply for any kind of loan other than conventional ways. Non conforming loan can help you in this regard. It’s not too much time consuming and it is customer friendly. But non-conventional loans require extensive paperwork than conforming loans and the interest rates are high.

Choose before you select:

A borrower should be more careful before choosing the right kind of non-conforming lenders. You must look for the best available rate in the market.  Check their customer services rating before you narrow down your searches. 

As a borrower, you may not have all the information to assess your potential.  Mortgage broker Hobart can help you to save your time. They are licensed and regulated financial advisors, who may help you to find the lenders who are ready to provide you a loan based on your circumstances. 

                                          Source Url:

https://medium.com/@selectabrokeraus/non-conforming-loan-non-conventional-way-to-your-financial-need-1195e06260ad

Tags
Mortgage broker Hobart Non conforming loans
Comments (0)