Your credit history/rating is one of many factors lenders use to evaluate your eligibility for a home loan and it is also one of the most important. The worse your credit is the harder it will be for lenders to trust that you will be able to pay off your home loan. As a result, if you happen to have bad credit, your chances of getting approved for a standard home loan are slim. However, there are a number of options available to you if you are looking for a home loan with a bad credit history.
Can you get a home loan with bad credit?
Sometimes. There are loans designed for people with bad credit, mostly from non-conforming lenders rather than the big banks. A broker who knows each type can match one to your situation. Whether you qualify still depends on what is on your credit file and how recent it is.
There are multiple loans specifically designed for people with bad credit mostly offered by non-conforming lenders. Our mortgage brokers have intimate knowledge of each type of bad credit loan and can advise you on the best for your situation. These include:
What happens if you have a default on your file?
A default is any overdue account, and it can come from a loan, a credit card bill or even a phone bill. Generally none of the big banks will accept you for a home loan while one is showing. There are options for defaults that are unpaid, partly paid or fully paid.
If you have defaulted on any of your loans this will be recorded on your credit score and generally none of the big banks will accept you for a home loan. A default is any overdue account and can apply to loans, credit card bills or even phone bills. However, there are loan options available for both defaults that haven’t been paid or paid partially, and defaults that have been fully paid.
Can you get a home loan after bankruptcy?
Bankruptcy is a serious mark against an application with any lender. Once you have been discharged, some lenders will consider a loan written for exactly that situation. It is not automatic, and fewer lenders will be open to you than before.
If you have a history of bankruptcy, it is a big red flag to many lenders, major or otherwise. However, even so once you have been discharged there are some lenders that will allow you to take out a home loan specifically for this situation.
Should you talk to a broker about bad credit?
If you have bad credit and are struggling to get approved, that is the point at which a broker is worth a call. Ours work on finding the bad credit home loan that suits your situation. What is actually available to you still depends on what your credit file shows.
If you have found yourself with bad credit and are struggling to get approved for a home loan consider a bad credit home loan. Our brokers can help you with finding the right bad credit home loan to suit your situation and improve your chances of approval for all home loans, bad credit or standard.
If you would like to learn more about applying for a home loan with bad credit history and the options available to you please get in touch with us today.