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5 Things To Watch Out For When Working With 2nd-Tier Lenders

Second-tier lenders are the non-Bank institutions that lend money to people in different ways. You must already know that it is not a thing for the faint-hearted. When you want to start this non-Bank lending, you must understand that the rules will be very different from conventional property financing lending and loans. The banks are taking a difficult step on the property landing nowadays, and it is paying to open the mind to the second-tier lenders so that they can move forward.

In this article, we will discuss five things to watch out for when working with second-tier lenders.

Comparison Of The Bank Pricing

Non-bank lenders exist because they are often the products that a conventional Bank does not offer, and it cannot provide that as well. But the difference is that they are not as regulated as a traditional and traditional bank, and they also land on different criteria compared to the bank when compared. If you are at low equity and over, you cannot meet the requirements of the bands, and you can get your loan from a non-banking lender. Such a case does not make any sense to compare the rates of both because you will be dealing with different thing and product.

Never Go Direct

When you are dealing with two-tier lenders, you should never get separated from the pack and try to get directions. Make sure that you are searching for all the different criteria when it comes to the bank and the non-banking facility criteria as well. It is opting for a competitive edge every day by offering unique things and services and different additional fees. The non-banking services range from 3 % to higher percentages.

In other words, we can say that a market trade and industry trend is not available for now. The offering of them is going to be different, and just because non-banking services approving you does not mean that they are going to be the best lender for you in this regard. Make sure that you are working with someone who is experienced and qualified as an advisor to guide you through the complexities of the market.

Hidden Fees

So that you stay up to date in about any hidden place that might be present and you do not know about it at a particular moment. Some lenders charge online free, and it is a type of interest money that is not even drawn yet. If you are approved for a 1 million dollar loan, but you have only drawn down $100,000, you can still be charged a line fee on the $900,000 later. Your advisor can explain it to you further.


Make sure that you understand how GST works in the two-tier service! If you are trading properties as a business, then your activities will attract GST, and you will not be able to avoid it. Typically banks exclude the GST from the value that they are putting on a property. 70% of GST will be included in $350,000.

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