Increasing number of Australian borrowers are forced to seek specialist lenders due to COVID-19 as traditional lenders turn them down
Since the outbreak of the coronavirus pandemic, many traditional lenders in Australia apply stricter lending criteria, resulting in borrowers being unable to secure credit, and thus, increasingly seeking assistance of specialist lenders.
According to mortgage brokerage NonConformingLoans.com.au, based in Sydney, they have been receiving a substantial higher number of inquiries from rejected loan applicants since the beginning of the current COVID-19 crisis, a sign of the great economic impact of the pandemic.
Ray Ethell, the Managing Director of Non Conforming Loans, states that several lenders and mortgage insurers have placed an embargo on borrowers working in industries particularly hard hit by the COVID-19 impact, including the retail, aviation, hospitality, real estate and entertainment sectors.
Ethell further comments that “many borrowers are unable to obtain credit from traditional lenders due to the tightening of lending criteria in response to economic uncertainty caused by the coronavirus pandemic. These applicants who have been declined for a loan or by lenders mortgage insurance due to policy change or their credit score have been turning to specialist lenders like Non Conforming Loans for a solution.”
As to him, the individual circumstances of the applicants are not being thoroughly assessed in many of those cases. Luckily, borrowers declined by traditional lenders need not despair as there are other options, for example, consulting a specialist lender, where they might have more luck, as they look into every specific case and assess it in detail.
“It is important to speak with a specialist lender or an experienced mortgage broker that is up with all the policy changes and can guide you through the lending landscape to find a financial solution,” Mister Ethell explains.