Increasing numbers of first home buyers do not qualify for a mortgage, but using alternate lenders could be a good short-term solution
The non-banking sector is a good stepping stone for those who can’t secure loans from a bank, according to broker Jeff Kerwin.
Kerwin from Nest Home Loans specialises in dealing with non-bank lenders, and says increasing numbers of first home buyers are falling outside the main bank criteria.
“The non-banking niche is highly specialised and has a vast range of products,” says Kerwin. “All the banks are fairly similar to one another, but with non-banks the interest rates can vary from 4% right up to 15%. You’ve got to really know that niche to get the client the right deal.”
“We get a lot of our leads from other mortgage brokers around the country who predominantly deal with the main banks, and those clients who fall outside the main bank criteria- which is becoming more common in the current climate- will be sent on to us as non-bank specialists.”
Kerwin says the brokerage went down this path because of the increasing amounts of people who do not fit the criteria for a bank loan.
“Banks are turning away a lot of people who don’t fit into their square box, and we’re able to help them get their foot in the door. We work towards an exit strategy from the non-bank loan and we have our own internal graduation programme where we review the client’s file every six months. If they fit mainstream bank criteria- for example, if their credit history starts improving- then we’ll take them back to the banks. So it’s only ever a stepping stone and a short-term solution to help people into home ownership.”
A former policeman, Kerwin says his team of ex-police brokers have found great value in their experience when it comes to dealing with home buyers.
“We work with all sorts of people, from high net-worth clients to people buying their first home who may be from low socioeconomic backgrounds,” says Kerwin.
“Trying to communicate to very different types of people can be challenging, and a lot of people just don’t like dealing with banks because they’re expected to know what they’re talking about, when they often don’t. So in that way, what we do really adds value. We work very closely with the Waikato Tainui local iwi, and getting them into home ownership has been a great project of ours.”
