What are Home Loans for Bad Credit?

Home Loans for Bad Credit are home loans that are specifically geared towards people with ‘ poor credit black marks ’ on their credit history such as paid or unpaid defaults, judgement’s, arrears or discharged from bankruptcy. It’s similar to a standard home loan in the sense that you’ll generally need to save up for a deposit and similar documentation is required. However they may come with higher interest rates than loans offered by banks or mainstream lenders. It may also be the case that bad credit borrowers will need to adopt at a lower loan- to- value rate( LVR), depending on the location of the security and the lender.

Poor credit home loans frequently have these kinds of conditions attached because lenders assess the risk of each borrower before approval is granted to lend them money. It may also be the case that if a lender perceives you to be a high threat borrower, they may ask you to pay lenders risk fees. For these reasons, a bad credit home loan could be significantly more expensive than the loans available to borrowers with a better credit history.

So, if you have poor credit, it’s important to consider applying for a home loan is the right move now or wait until your credit file is clear.

What do bad credit home loan mortgage brokers do?

A Mortgage Broker can help you in your hunt for a home loan by recommending lenders who might be willing approve you based in your particular circumstances. Generally speaking, a bad credit mortgage broker will ask you for the same information as a standard mortgage broker when assessing your operation, which means you’ll need to give details similar as payslips, an overview of your means and arrears, and clones of your motorists licence, passport or other IDs.

In addition to this, it’s likely that they will also ask for explanations for each ‘ black mark ’ on your credit report. This means you’ll probably need to be prepared to tell them

• the sequence of events that led to how the ‘ black marks ’ on your credit report happened.
• If these "black marks" been rectified or paid
• what you did to overcome these issues, and why you’re now in a more stable financial position.

It’s important that you be open and honest about your finances, so a broker can most effectively help you.

How do you choose a bad credit mortgage broker?

When choosing to work with any mortgage broker it’s important to work with a Broker that specialises in Bad Credit Home Loans as they are familiar with the different policy settings of their panel of lenders.

Ray Ethell offers a wealth of experience to his clients, gained from over 20 years in the Finance industry, and prides himself on providing reliable customer focused service.