We believe that former adversity shouldn’t impact upon your ability to get a home loan, and we specialise in sourcing suitable products for those that have experienced adversity via a less-than-stellar credit history, bankruptcies, defaults, Part IX debt agreement, or judgments. Sometimes life gets in the way of your wealth creation or home-ownership goals, so we help you get back on track with finances specifically suited to your circumstances.
While the larger banks are typically more conservative with their risk assessment, we have a number of other lenders on our panel that may place ‘restrictions’ on your borrowing, but the products made available are still competitive and will enable you to enter or re-enter into the property market.
Some minor defaults won’t qualify you from some of more robust products offered by bigger lenders. Minor defaults under $500, for example, may still qualify you for a 95% product (5% deposit), while you still may be able to borrow up to 90% if you have experienced other types of hardship. Borrowing up to 80% of a property is usually not a problem regardless of your credit history.
What is Bad Credit
If you do have bad credit it’s likely you’ll find a record of it on your credit file. Many of the marks on your file may impact on your suitability for a big-bank product, but they won’t necessary qualify you from other (often very competitive) lenders.
Marks that may compromise your borrowing include the following:
- Mortgage arrears. A bank will not generally refinance your loan if you have missed just one repayment in the last 24 months. Various lenders have different policies.
- Bad Credit History. Adverse listings such as defaults, bankruptcy, judgments, court writs or too many credit inquiries on your Equifax credit file may cause a lender to question your suitability for their products.
- Lender Credit History. A bank never forgets. They have long memories and tend to treat former customers with bad credit with a particular brand of contempt. A new lender is probably better suited.
- Unpaid Bills. Outstanding bills such as council rates or tax bills may not initially show up on your credit file but will likely reveal themselves in the supporting documents you need to provide.
- Company Trouble. If you’re the director of a company that is in financial trouble, receivership or liquidation then this can affect your personal credit history.
- Over Committed. It’s always best to unload your personal debt burden before applying for a loan as it impacts upon your borrowing capacity.
Getting Approved
You can still get approved for up to 95% of the property despite the hardship that caused your current problems. The maximum borrowing LVR, and the rate applied to your product, varies depending upon current outstanding debt and the extent of your circumstances.
We have a number of non-conforming lenders on our panel that apply rates and conditions based on their assessment of their risk. You should call us now and have a quick discussion; there are steps you might be able to take now that’ll improve your changes of better borrowing opportunities.
Your Circumstances Change
While the rate applied to a non-conforming product is higher, and the features may not be as extensive, your circumstances and financial position will change over time. We keep in regular contact with you so that when you qualify for a product that offers savings you’re able to take full advantage of the move.
