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Any experience - Loan with a Non-Bank Lending Institution?

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  • Any experience - Loan with a Non-Bank Lending Institution?

    Hi everyone,
    Great community. Hope you all are doing good.

    I have a question about buying a second investment property in New Zealand.
    I hope i don't get crucified for asking and buying a 2nd investment property.

    I was really close on getting my second property using the equity of my first property.
    Unfortunately with the new LVR rule (60/40%) i am unable to get the loan i was looking for.

    My mortgage broker has given me an option of getting a loan from a Non-bank lending institution like bluestone or remisac.
    This option allows to me get 80/20 LVR although i am ok with 70/30

    According to the broker there are a few extra costs compared to a normal bank
    1) $600 extra application fees
    2) cost of house evaluations ($1600 for 2 houses)
    3) and the big one - 1% extra interest rate compared to a normal bank

    He also thinks i can easily go back to a normal bank in 1-2 years.
    There is some loophole/condition which basically allows me go back to a bank even if i don't meet the 60/40 provided that the loan is being transferred and the loan amount is the same.
    So no additional loan amount.

    I am currently weighing up options and even with the above extra costs it still makes sense to purchase another property rather than let equity sit in the bank.

    I have a few questions
    1) has anyone had any experience with NBLIs.
    2) Is it as simple as i have described it above.
    3) Are there any other hidden costs or Ts&Cs i should be aware of?
    4) is it easy to go back to a normal bank after 1-2 years.
    5) Is it a big no no and i should stay away?

    Any tips, experiences, suggestions will be helpful

    According to the mortgage broker thats the only option i have.
    There is no way i can get a loan with a normal bank.

    Thanks in advance.
    Stay Safe!

  • #2
    "Normal bank?" Whazzem?

    There aren't many about, now, but one of the big credit unions might be worth a try. Midland may also be an option. Do we still have Building Societies?
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