The Rise of Non-Bank Lending in the Market
Non-bank lenders can be a valuable option for property investors who are refinancing or who want to borrow for a new investment to add to their portfolio. Property investors are advised to look not only at the major banks but also at the option of non-bank lenders.
Non-bank lenders have increased their presence in recent years and are a legitimate option that increases competition in the lending market to the benefit of consumers.
Non-Bank Lenders
Non-bank lenders differ from the other two options investors have, those being mutuals and banks who provide deposit accounts and are authorised deposit-taking institutions (ADIs) fully regulated by the Australian Prudential Regulation Authority (APRA). When it comes to non-bank lenders, however, they do not issue those deposit accounts and as a result, are not regulated by APRA.
The ASIC Regulation
This doesn’t mean non-banks aren’t safe; they are still regulated by the Australian Securities and Investments Commission (ASIC) and bound by National Consumer Credit Protection laws.
The Advantage of Non-Branch Operations
While some investors can be put off by the fact non-bank lenders don’t have physical bricks and mortar outlets, it can actually be an advantage because they are free of the burden of large branch networks and corporate structure.
Testimonials on the Efficiency of Non-Bank Services
Managing director of loans.com Marie Mortimer said the speed and convenience of service of non-banks was a big edge over the larger financial institutions. “What our team at loans.com.au likes to say, we can have customers on the phone and apply for their home or investment loan before the time it would take to get in the car and drive to the local branch,” she told Your Investment Property Magazine.
Fast Turnaround Times
The fast turnaround time that non-banks can offer is also a reason investors wanting to pounce on a peach of an investment that might get snapped up by someone else first might want to consider a non-bank lender.
Choosing a Reliable Lender for Quick Settlements
“Obviously in the current market, some buyers are facing difficulty buying a property due to the fierce competition of home buyers around Australia,” Ms Mortimer told Your Investment Property Magazine. “This means it’s important to choose a lender you can trust to get you to settlement as soon as possible. These days, major banks can take weeks if not months to settle, so you may find it considerably faster to choose a non-bank lender, such as loans.com.au or Firstmac.”
Call Perry Finance today to make sure you are considering all your lending options, both major banks and non-bank lenders, for your next property investment.
