Bad Credit Home Loan
If you have bad credit, and you have blemishes on your credit file, it does not mean you can’t get a loan. it means you will more than likely require a Bad credit home loan. these loans are unique in that they offer you the ability to get a home loan or mortgage despite the bad credit history.
If you have a problem with your credit file it is best to deal with it upfront and not try to hide the fact. This makes getting your loan approved much easier.
Often there are late payments which you might think are a problem. These instances don’t necessarily mean that you have a problem so it is best to apply directly to Veda Advantage for a report. This inquiry does not leave a mark on your file and costs approx $40.00. It will give you peace of mind once you know the facts.
Your credit file is administered by Veda Advantage in Australia. This organization is the reporting body for all credit enquires you make. It is also the body who is notified is you don’t repay your commitments.
Who are the Bad Credit Lenders?
There are many bad credit lenders in the market place who handle loans to clients who don’t have a clean credit record. These lenders have different ways about giving credit. These lenders who specialize in bad credit home loans are at times also known as non conforming lenders. most of the bad credit home loan lenders are also private institutions which you might find listed on the stock exchange.
The bad credit home loan lenders generally don’t have Lenders Mortgage Insurance generally. They may charge a risk fee instead of mortgage of LMI, but your Mortgage Provider consultant will guide you through the different lending options. The standard amongst all these lenders is risk for rate. The higher the risk to the lender the higher the rate. Some apply the same logic to the way their fees are charged.
Am I Eligible for Bad Credit Home Loan?
You could get a bad credit home loan if you have secure and regular employment and you are not currently Bankrupt. Further, you must be able to afford the repayments based on the amount you are applying for, whilst providing suitable property security for the mortgage.
Generally you must be discharged from Bankruptcy for 12 months prior to a lender considering you for a loan but there are exceptions.
If I have Credit Card Debt, can I get a bad credit home loan?
Having credit card debt does not stop you from getting a bad credit home loan. In today consumer based society it is easy to be lured into easy credit. Let’s face it, finance companies send you a pre approved credit card in the mail. At times, some people find themselves in deed credit card debt.
If you find yourself in credit card debt and this is becoming a burden, one of the best options one can take is to consolidate their unsecured debts to their home loan and spread out the term, thus reducing their monthly commitments. Best of all, by consolidating your credit card debts onto your home loan, you will generally get a much lower interest rate than your credit card.
If your credit card payments have been late or in arrears, you could still get a Bad credit home loan. The final rate will depend the level of bad credit and arrears you have. When lenders assess this type of credit history, they will generally grade your conduct history. The better the grade you get, the better the rate that will apply to your loan.
Can I get a Bad Credit Home Loan with if I have Arrears or Unpaid Home Loan Repayments?
Unpaid home loan repayment and arrears are probably the most serious of bad debt credit. Generally there are good reasons for missed or late repayments.
Most lenders in this field rely on the story behind how a customer got into a particular situation rather than judging the person like a lot of the traditional banks do.
This is where your Mortgage Providers consultant comes into the picture. Your consultant will ask you to give them the whole story on how you came to be in this situation. Please don’t leave anything out as the lender may decline your loan if other facts come to light after the application is lodged.
What do Lenders Look for when assessing a bad credit home loan?
In today’s tight credit market, when lenders are assessing a bad credit home loan, they are primarily looking for affordability. Further, lender’s are concerned if a borrower is in trouble the borrower may try to “borrow” their way out of their situation. Because of this, many lenders become concerned when they see multiple applications for credit. Some more conservative lenders are limiting the number of enquires to 4 in the past 6 months.
In order to best approach this situation, one must be honest with himself upfront and seek good guidance. If you think you are in trouble get help rather than try to fix this your self. Sometimes your efforts to fix the situation make the finance professionals job harder, so ask for professional help early.What will my repayments and fees be with a Bad Credit Home Loan?
The repayments and fee’s applicable on a bad credit home loan differ from normal loans. As we have previously pointed out, lenders who lend in this part of the market base their costs on your situation. This will predicate the interest rate and upfront cost and indeed the ongoing fees.
The interest rates for bad credit home loans can range from an increase of 0.3% – 7% from a normal bank loan. The additional cost in fees can also range from an increase of $300 to 3% of the loan amount.
The rule of thumb is not to worry too much about the interest rate. The thing that should most concern you is the repayment. By accepting your situation and coming to realization that there is a problem and accepting that fact that you can get your self out of the situation by making your repayments on time will go along way to resolving what could be a devastating life event.
At Mortgage Providers, we have access to a wide panel of bad credit home loan lenders. Best of all we know the policy differentiations of these different lenders. we know what fee structure, and interest rate matrix they offer for different bad credit history. Call us to discuss your bad credit scenario and we will be glad to help.