How Can I Get A Home Loan With Bad Credit?

Let us show you how you can get your home loan approved even with bad credit.

Find out how a specialist lender in Australia can help you:

Bad Credit Home Loans

Video transcript:

Is it possible to get a home loan with bad credit? Are you being rejected by the banks due to black marks on your credit file?

Here’s what you can do to get your loan approved.

Meet Paul.

Paul is ready to settle down and buy a home to raise a family but it seems like his rocky past has caught up with him.

Due to having defaults after a bad business venture a number of years ago, the bank has declined his application.

When you apply for a home loan, lenders will always check your credit file.

Your credit report is basically a history of your financial activity.

It’s one of the main factors in determining whether the banks will even consider your loan.

This is not good news for Paul.

But all is not lost.

There are specialist lenders that can consider many situations that the banks won’t.

This is great news for people who have been through unfortunate events such as a divorce, loss of job, injury, business failure or more.

Looks like Paul is in for a chance at that family home.

So how much can Paul borrow?

Having a large deposit is the key to success! Typically Paul would be able to borrow a maximum of 80% or 90% of the property’s value.

Paul may be able to borrow without a deposit. However, this is only possible if Paul has a good reason for his bad credit history and his parents can help him with his loan.

So what is considered to be ‘bad credit’?

Well, it means things like missed repayments on your debts, bankruptcy or a Part IX agreement, adverse listings on your credit file such as defaults, judgements or court writs, a bad credit history with the lender you are applying with, unpaid bills or tax, or having too many enquiries on your credit file.

So which lenders can help Paul?

In some cases we can get your loan approved with a bank but we need to present a good case with lots of evidence.

Alternatively, we can apply with a specialist lender.

They have more flexible lending policies than the major banks and they will assess your application on its merits.

Remember though, the interest rate will reflect the risk of your loan. Your interest rate will vary depending on the size of your deposit and the nature of your credit history.

Does this mean that Paul will be stuck with paying a high interest rate?

Not necessarily, specialist lenders are a vehicle to get people into a home. Once Paul’s credit file becomes clear, he will be able to refinance to a more competitive rate.

This is fantastic news for Paul. He ended up going with a specialist lender and purchased a home for him and his family.

A year later we were able to refinance his home loan with a bank at a great interest rate.

He and his family are now enjoying their dream home.

And you can too by contacting the Home Loan Experts.

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