Bad Credit Home Loans
Bad credit home loans offer financing for individuals who have been denied loans by lenders due to credit defaults, bankruptcy, Part 9 or 10 debt agreements, and other credit-related issues.
What is considered bad credit?
This includes...
Missed or late payments on credit cards, bills or loans
Multiple enquiries/applications with various lenders in a short time frame
Defaults
Mortgage Arrears
Court Judgements, writs and summons
Unpaid Defaults
Bankruptcy
Part 9
Part 10
Serious ATO debts
What Is Considered A Bad Credit Score?
In Australia, a credit score below 500 is considered bad credit, and a score under 400 is viewed as very bad, especially given that the average Equifax Score is around 550.
Can I get a home loan from a bank if I have bad credit?
Yes, it's possible to get a loan from a bank even if you have bad credit. The key factor is the history of your credit issues and whether they have been resolved. Our brokers can provide the best advice based on your specific circumstances.
Can I get a home loan from non-bank lenders?
Absolutely! Non-bank lenders, also known as non-conforming specialist lenders, are available to assist with bad credit home loans. They assess applications differently from major banks, often providing more flexible options for those with credit challenges.
How much can I borrow?
Borrow up to 95% of the property value if you have minor paid defaults up to $500 or larger defaults, judgments, court writs, part IX agreements, or discharged bankruptcy on a case-by-case basis.
How do I qualify for a home loan with bad credit?
Non-bank lenders give Australians a second chance by assessing each individual on a case-by-case basis. They will listen to your situation, build a case for you, and work out a solution that suits your needs, whether immediately or in the future. Initially, you may be assessed as high risk, but after thorough checks, the outcome can change in your favor.
Tips for Qualifying for a Bad Credit Home Loan
1
Choose the Right Lender
While major banks have strict lending criteria, non-conforming and specialist lenders often take a more flexible approach to bad credit. Finding the right lender who understands your situation is key.
2
Understand Your Credit File
Familiarize yourself with your credit history and take proactive steps to address any negative marks. Working with a specialist mortgage broker can help you understand how your past debts are viewed and how to present your financial history in the best light.
3
Manage Your Finances Wisely
Avoid adding new negative entries to your credit file. Address financial challenges by.
4
Paying your debts on time.
Keeping open lines of communication with your lenders.
Making partial payments toward your debts, even if you can’t pay the full amount.
Clearing any existing defaults.
5
Consider Timing
In some cases, waiting for negative listings to be removed from your credit report before applying for a loan can be beneficial. However, buying property sooner could help you build equity. Evaluate your situation carefully—if you’re close to clearing a negative listing, it might be worth waiting to secure better loan terms.
6
Seek Professional Advice
If you’re uncertain about the best course of action or need help improving your credit, professional services like Credit Repair Australia can provide valuable support. Our brokers can help you decide whether it’s better to apply now or wait until your credit score improves.
Common Mistakes to Avoid When Applying for a Bad Credit Home Loan
01.
Overlooking Loan Terms
02.
Not Checking Your Credit Report
03.
Ignoring Your Current Debts
04.
Applying With Multiple Lenders at Once
It’s essential to fully understand the terms of the loan you’re considering. This includes the interest rate, fees, and repayment schedule. Don’t rush into accepting the first offer you receive; the specifics of the loan can have a significant impact on your financial health.
Before applying, review your credit report thoroughly. Errors or outdated information can make your credit appear worse than it is. Correcting these inaccuracies can improve how lenders view your application.
It’s important to stay on top of your existing debts, such as credit card payments and other loans. Missing payments or paying late can further damage your credit score, making it more difficult to secure a home loan.
Although it might seem beneficial to apply to several lenders simultaneously, this can actually harm your credit score. Each application can slightly reduce your score. Instead, research and compare lenders to find the one that best suits your needs, then apply strategically.
Need Expert Advice? Contact Loanbox!
Our brokers have extensive experience helping clients who have faced financial difficulties or have bad credit. Contact us today at 1300 965 688 or inquire online, and one of our specialists will reach out to assist you. Don’t Let Bad Credit Keep You From Your Dream Home!