Alternatives grow for rejected borrowers
The options available for borrowers who don't qualify for loans from mainstream lenders is expanding rapidly this year with a number of new players joining a market once confined to solicitors and a small number of finance companies.
Pepper Homeloans is the latest to join the fray, this week launching a range of loan offerings aimed at those who can’t meet the income, deposit, credit history or residency requirements demanded by banks, building societies, credit unions and mortgage originators.
Melbourne's Liberty Financial and mortgage specialist Wizard have also recently moved into this market, GE Mortgage Solutions is another player.
With the number of Australians declaring bankruptcy displaying an upward trend and household debt at high levels, the industry estimates that up to 10 per cent of consumers in the market for a home may need this form of finance – at a time when solicitor-backed mortgage schemes are under a cloud.
Bankchoice will soon be adding a new ‘Alternative Borrowing' category to its website outlining the range of loans on offer including the conditions and lending criteria that apply.