Who Can Secure A Bad Credit Loan?
People with a black mark on the credit report, due to job loss, divorce, business failure, injury, or a multitude of other reasons – can still secure finance and attain a bad credit home loan. Traditional Lenders, like the major banks, are generally extremely wary of borrowers who have defaults or who constantly have credit issues. This is where non-conforming lenders step in with a more flexible set of loan qualifying criteria. Some of this criteria includes:
Small Paid Default
- If your default is under $500 and was paid over six months ago, a bad credit loan lender can assist you in borrowing up to 90 percent with a bad credit loan; sometimes 95 percent LVR for a home’s property value.
2 or More Small Paid Defaults
- If your paid defaults are under $1000 from financial institutions (banks) and you have less than $500 from the non-financial institutions (phone company), you could receive 85 to 90 percent of the home’s property value.
Moderate Paid Defaults
- If you have $3,000 in paid defaults, you can attain up to 80 percent of a home’s property value using a prime lender, 90 percent using a specialist lender who provides a bad credit loan or the complete property value amount so long as your parents provide a security guarantee.
Large Paid Defaults
The largest paid defaults, ranging from $3,000 to $50,000, are usually looked at on a case-by-case basis and using a good explanation that can be backed by evidence. Loans of up to 90 percent of the property value can be given with a specialist lender’s help.
If there are any unpaid default a loans, a non-conforming lender will only permit up to 90 percent of the property value. Most lenders demand that defaults are paid before loan approval.
Should you have any court writs or judgments against you, you can potentially get a non-conforming lender to provide you a bad credit loan with up to 90 percent of the home’s property value.
Part IX Agreement
- The Part IX Debt Agreement is an alternative to filing for bankruptcy. This kind of agreement is generally more flexible and has an array of options like:
- Agreement with creditors to pay less than the debt’s full amount
- Agreed upon system of payments set an affordable level
- Transference of some property you own to a creditor to meet some or all debt payment
- Organizing of temporary suspension on debt payments
It is possible to attain a home loan after you’ve completed the Part IX agreement. Here’s what you can expect:
- The borrowing of up to 90 percent of the home’s property value
- Requirement of at least 16 percent of the home’s purchase price for the deposit
- Larger deposits can qualify you for the standard bank interest rates
Special Note: If still paying on the Part IX Agreement, you cannot attain a home loan.
Bankruptcy and Loans
A lender will look at bankruptcy issues based on your particular situation and the size of the deposit you’re willing to put up.
Discharged Bankruptcy – If your bankruptcy was discharged, you can borrow up to 90 percent of home’s purchase price. However, you must have between 14 and 16 percent of the purchase price yourself to ensure the deposit, stamp duty and Lenders Risk Fee will be covered. You can be discharged for as little as one day to qualify.
Undischarged Bankruptcy – If you’re currently in bankruptcy, you are not allowed to attain a home loan, as this is illegal.
“Thank you so much for helping me get my refinances done. I can finally move ahead now that I no longer am burdened by defaults. I also admire the efficiency and professionalism with which you got the job done. Rest assured that I will recommend your services to all my family, friends and colleagues.”
– Bill Jackson, VIC
“Adam and I would like to thank you for assisting us in securing a new home. Even though our circumstances were very complex, you were able to guide us to the best possible product for our situation. Nothing was too hard for you to respond to and we are grateful that you never kept us waiting for an update.”
– Sarah Walker, ACT
“Dear Melanie, Thank you so very much for all of your help in securing my mortgage and your expert advice. I sincerely appreciate all you have done for me – when I thought I had exhausted all my options you proved me wrong and for that I am grateful”.
– Jodie Oconnell, VIC