HOME > BLOG > Home Loan Advice > Redefine the Risks of a Non-Bank

Over the past few years, the non-bank lenders presence in the mortgage industry has continued to grow despite certain perceptions.

Borrowers need to know if there actually are any risks when it comes to non-bank lending so they are able to make an informed decision.

In the past, borrowing from a non-bank has been considered a risky investment by some; however this is not the case. Risk is a word that is used frequently in the mortgage industry. It seems that some lenders are now using it as a tactic to keep their existing customers and attain new customers.  It is important to redefine what risk is and show borrowers how they can benefit and save money by going with a non-bank lender. 

Many borrowers may be sceptical to borrow money for a house as it involves a large sum of money. However, what needs to be realised is that it is not a risk for you. Non-bank lenders are giving you the money, so if anything, they are the ones making the risk and before they hand over the money, they will ensure you are capable of paying back the loan.

One of the other alleged risks was that exit fees were extremely high. However, these fees were abolished in July 2011. Therefore, borrowers have the freedom to change loans if they find a better deal and don’t have to worry about being locked down when they take out a home loan. Once again, this is a bigger risk for the lender because even though you may have taken a loan out with them, there is no guarantee you will stay. So, they will need to work hard to keep you as a customer.

After the Global Financial Crisis (GFC), many borrowers have stuck with what they know and taken out mortgages with the big banks. Although the GFC did have an impact on some non-bank lenders, at State Custodians we have continued to offer our customers safe and secure home loans. Hearsay within the mortgage industry is not always correct, therefore it is worth it for borrowers to do their own research and redefine the risks for themselves.