The clue is in the title and this is a loan that doesn’t conform to the normal standards that you would associate with taking out money to purchase a home. Sometimes getting finance for your new property doesn’t go as straightforward as you would have liked and so this is when a non-conforming loan can be incredibly useful. If you are currently experiencing issues with your credit score but you still want to buy a property then a non-conforming loan may be just right for you.
It might be that you are self-employed or you just started a new business and so you don’t have the relevant credit score nor the paperwork to give to what could only be referred to as normal lending institutions. It may be also the case that you do not have the money to put down the 10 or 20% deposit for the property and so this is when you need to turn to non-conforming loans. There are two non-conforming types of loans currently available to you and they are the following.
- A bad credit home loan – You will qualify for a loan such as this if you can supply proof that you have a reliable and regular income coming in and a reasonable credit history. Clearly your lender will want to talk to you about why it is that your credit score is not so good and they will want to see that your financial life has changed significantly before they can consider providing you with a non-conforming loan.
- Debt consolidation loan – This is incredibly popular because it allows you to take all of the money that you call right now and put it into one final some so that you can make your payments at the same time and in the same amount. You get to pay one interest rate that is probably more favourable than the many that you have now and it gives you quite a lot of financial freedom because there is always the option to lengthen the time that you are expected to pay the loan back in full.
It is important that you understand the terms and conditions that come from such a loan and it’s likely that you will be expected to pay a higher interest rate if your credit history is bad. If you can prove that you have a regular income stream then the increase in interest rates isn’t significant and it could be only as high as point one of a percent.