Can I Get Approved For a House With Bad Credit?
Yes. However, major banks are unlikely to give you a home loan. But there are non-conforming lenders that specialise in these "out-of-the-box deals". Your unique circumstance will be assessed as to why your repayments were missed. "Bad Credit" mortgage lenders use a common sense approach not applied by larger banks.
Why would banks lend me money again?
✅Borrowers that are approved for a Bad Credit mortgage rarely default again.
✅Everyone deserves a second chance.
✅Defaulting on a repayment doesn't mean you are irresponsible or a bad person.
✅Everyone deserves a second chance.
✅Defaulting on a repayment doesn't mean you are irresponsible or a bad person.
Borrowing capacity with bad credit?
✅Borrow up to 90% of the property value with larger repayment defaults such as:
👉court writs
👉judgements
👉part IX agreement or informal debt agreement
👉discharged bankruptcy
👉court writs
👉judgements
👉part IX agreement or informal debt agreement
👉discharged bankruptcy
But won't I pay higher interest for Bad Credit Mortgages?
✅Yes. The idea is to use them for the short term and then refinance in 2-3 years.
✅Helps you make a fresh start without selling your house.
✅Cheaper than selling all your assets and starting again later.
✅Gives you breathing room to get ahead of your repayments and clean your credit file.
✅Can have a long loan term, which helps if you haven't caught up in 2-3 years as planned.
✅Helps you make a fresh start without selling your house.
✅Cheaper than selling all your assets and starting again later.
✅Gives you breathing room to get ahead of your repayments and clean your credit file.
✅Can have a long loan term, which helps if you haven't caught up in 2-3 years as planned.
Do I qualify for a Bad Credit Mortgage?
Large Default > $3,000:
✅Must have a good reason for the default with evidence to back it up.
✅Up to 80% with a non-conforming lender.
✅Must have a good reason for the default with evidence to back it up.
✅Up to 80% with a non-conforming lender.
Moderate Default < $3000:
✅Borrow up to 80% with a prime bank lender.
✅Borrow up to 90% with a non-conforming lender.
✅Borrow up to 100% with a guarantee from a close family member.
✅Borrow up to 80% with a prime bank lender.
✅Borrow up to 90% with a non-conforming lender.
✅Borrow up to 100% with a guarantee from a close family member.
Small Default < $500:
✅Must have been paid over 6 months ago.
✅Must have not missed a payment for last 6 months.
✅Borrow up to 90% with a prime bank lender.
✅Must have been paid over 6 months ago.
✅Must have not missed a payment for last 6 months.
✅Borrow up to 90% with a prime bank lender.
How did I get bad credit?
A bad credit score doesn't make somebody a bad or irresponsible person. There are many factors that can contribute:
✅Fell on bad times.
✅Property market fell in the area you bought.
✅Lost your job.
✅Business made losses or waiting for customers to pay you.
✅Unexpected medical expenses.
✅Overextended on financial commitments.
✅Fell on bad times.
✅Property market fell in the area you bought.
✅Lost your job.
✅Business made losses or waiting for customers to pay you.
✅Unexpected medical expenses.
✅Overextended on financial commitments.
How could I have prevented bad credit?
There are definitely some financial stress indicators before a default or bankruptcy. The ABS cited these as the main ones:
✅Selling items to keep up with repayments.
✅Income not meeting repayments.
✅Struggling to pay utilities and household bills.
✅Worrying about food bills or even skipping meals.
✅Spending more than earning.
✅Selling items to keep up with repayments.
✅Income not meeting repayments.
✅Struggling to pay utilities and household bills.
✅Worrying about food bills or even skipping meals.
✅Spending more than earning.
What is considered "Bad Credit?"
If you've missed a payment on your credit card or mortgage repayment then it will probably show on your credit file and reflect in your credit score. This can prevent a bank extending you a home loan.
✅Unpaid bills or tax.
✅Bank credit history - especially for lenders you've dealt with in the past.
✅Bad credit history.
✅Mortgage in arrears - needs to be clean for at least the last 6 months.
✅Company in receivership or being liquidated.
✅Too much debt compared to your income.
✅Total liabilities greater than total assets.
✅Unpaid bills or tax.
✅Bank credit history - especially for lenders you've dealt with in the past.
✅Bad credit history.
✅Mortgage in arrears - needs to be clean for at least the last 6 months.
✅Company in receivership or being liquidated.
✅Too much debt compared to your income.
✅Total liabilities greater than total assets.
Can I get approved?
✅If borrowing less than 80% of the property value, then you can get approved.
✅Lender will be more inclined to extend credit if your most recent payment history is clear.
✅Must be discharged from bankruptcy or have entered into a debt agreement (part IX agreement).
✅Lender will be more inclined to extend credit if your most recent payment history is clear.
✅Must be discharged from bankruptcy or have entered into a debt agreement (part IX agreement).
What's on my Credit File?
✅All loans that you have applied for in the last 5 years.
✅Court judgments & writs.
✅Missed repayments.
✅Whether you've been bankrupt.
✅Court judgments & writs.
✅Missed repayments.
✅Whether you've been bankrupt.
What are Bad Credit Mortgages?
1. Bankrupt Home Loan:
✅Must be discharged from bankruptcy before application.
✅This means you can apply for credit again.
✅After discharge you are no longer required to hold limited assets.
✅Must be discharged from bankruptcy before application.
✅This means you can apply for credit again.
✅After discharge you are no longer required to hold limited assets.
2. Tax Debt Mortgage:
✅More common than you think.
✅The ATO debt is added to the home loan.
✅This clears any ATO debt and allows you to borrow.
✅More common than you think.
✅The ATO debt is added to the home loan.
✅This clears any ATO debt and allows you to borrow.
3. Informal Debt Agreement (part IX):
✅If you can't pay your debts, a Debt Agreement Administrator can help you enter into an agreement with your creditors or bank. Once fulfilled, the agreement is discharged.
✅This remains on your credit file for up to 7 years.
✅There are specialist lenders who can help.
✅If you can't pay your debts, a Debt Agreement Administrator can help you enter into an agreement with your creditors or bank. Once fulfilled, the agreement is discharged.
✅This remains on your credit file for up to 7 years.
✅There are specialist lenders who can help.
4. Debt Consolidation Mortgage:
✅Roll multiple debts into one manageable repayment under one lender.
✅Roll multiple debts into one manageable repayment under one lender.
What is a non-conforming lender?
A lender that will assess you on a case-by-case basis. Some include:
✅Adelaide Bank
✅Pepper Money
✅Bluestone Mortgages
✅MKM capital
✅And more...
✅Adelaide Bank
✅Pepper Money
✅Bluestone Mortgages
✅MKM capital
✅And more...
Do I have to use a mortgage broker to access Bad Credit home loans?
✅No. But I suggest you do.
✅A mortgage broker will know the lender best suited to help your specific case.
✅Remember non-conforming lenders are case-by-case. Presentation of your finances is paramount to approval.
✅A mortgage broker will know the lender best suited to help your specific case.
✅Remember non-conforming lenders are case-by-case. Presentation of your finances is paramount to approval.
Should I wait for a clean credit file before applying?
✅This would be ideal. But life is rarely ideal. Sometimes paying extra interest for 2-3 years is a better move than missing a property bull market or paying excessive rent.
✅If you want to wait, there are credit repair companies that can help you move quicker. Speak to us and we can refer you.
✅If you want to wait, there are credit repair companies that can help you move quicker. Speak to us and we can refer you.
Talk to somebody.
I'm here if you need me.
No fee service.
Matthew Stack
matthew@mortgagebrokerrevesby.com.au
www.mortgagebrokerrevesby.com.au
0423 237 242
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