Compare Home Loans
Compare Home Loans
A bad credit score can haunt adults for years – with many being entirely unable to pursue mortgage and loan applications as a result of their previous mistakes. Unfortunately, each time a repayment is missed or a debt overlooked; marks will be placed against the borrowers name and this is what typically results in a poor credit score. This ailment is very common and affects tens of thousands of Australians across Sydney and Melbourne.
With the recent surge in the property market, banks introduced new legislation to help buyers to secure home loans even if their credit is poor - and these solutions have quickly become known as bad credit home loans. But if you are considering a loan like this it is very important that you compare all available home loans such as interest only home loans for investors to avoid getting locked into a poor deal in relation to the interest rate or the amount that a bank will lend you (LVR) in relation to the property value.
How do they work?
These types of home loans work in much the same way as regular ones; albeit with a few strict policies that banks have put into place to secure their lending habits. Some options require larger deposits to be made when asking to borrow cash, while others may demand the financial backing of a guarantor.
Mortgages for people with bad credit can be obtained, but in order to do so it’s important to pursue the right type of home loan based on the applicants financial situation.
For instance, if an applicant has a bad credit history but only needs to borrow a small amount of cash – then they might be in a position to provide more in the form of a deposit. Although it isn’t a guarantee that a loan will be approved by a bank; it can certainly help to lighten the load and make a lender more willing if they see how invested the borrower is in the first place.
Secondly, for those that don’t have any savings and would like to apply for a larger sum of cash from a bank whilst possessing a bad credit score, the potential for a guarantor to help with securing the loan can be very prominent. By turning to a family member or a notable friend that has the financial income and credit history to prove that they could repay what’s owed should the borrower default – plenty of banks will at least consider the application.
There are also specific loans that are predominantly available to those with bad credit. Most will require a guarantor’s signature and backing, a larger deposit – or a selection of valuable assets to be used as collateral should the borrower fail to keep up with their repayments. Applying for the right type of mortgage can make a lot of difference to the potential for a successful application however, and seeking expert advice from a broker or financial specialist can be the best way to go about this.
Compare home loans online to get the full range of options before you commit to a deal that you may not be able to afford.
More on how to find the right property for you using a buyers agent.
Uno Home Loans
Address: Level 1, 10-14 Waterloo Street, Surry Hills, Sydney NSW 2010
Hours: Closed now
Phone: 13 38 66