5 Ways to help you get approved for a Home Loan with Bad Credit
A healthy credit rating can play an important role in getting a home loan approved. However, all is not lost if you don’t have a healthy credit score. We have listed 5 tips that can help you get a home loan approved for your dream home!
List of 5 amazing tips:
Consult with a Mortgage Broker: Mortgage brokers are specialised lending consultants with industry experience and inside knowledge of the banking industry. Brokers will have access to a range of lenders, each with their own unique set of lending guidelines. A broker can assess your application and use their knowledge to determine the best financier for your credit profile. If you have issues with your credit file, a specialised consultant can provide assistance and advice to help get you approved.
Get a copy of your credit file: If you haven’t checked already, it’d be a good idea to access your credit file. You can do this online at veda.com.au. The state of your credit file can be a determining factor when applying for any form of finance, especially for a home loan. If you have outstanding defaults, it’s a good idea to pay them off before trying to get approved for a loan. Financiers won’t look favourably upon an applicant that doesn’t pay their debts. Once again, consult your specialised broker to map out a plan to move forward.
Be honest with your broker: There’s nothing worse than presenting an application to a financier for them to find out the applicant has not been 100% honest and upfront with the information provided. If this happens, your chances of getting approved will drastically decrease. Be upfront! Your specialised broker can assess your profile and determine which financier’s lending criteria will best match your application. You will have a greater chance of getting approved by being honest compared with being caught out not telling the truth.
Don’t’ apply through multiple lenders: If your credit file has a lot of activity, financiers can look upon this negatively. An active credit file will have numerous applications through multiple lenders within a short period of time. This can come across desperate and would usually indicate that most lenders are declining your application so in turn you move onto the next. As mentioned previously, your broker can do the leg work for you by funneling out the lenders who will likely decline your application and presenting to financiers that will give you the best chance of approval.
Avoid mortgage insurance – Save up your deposit: If you are applying for a loan amount which exceeds 80% of the value of the property value, your application will be assessed by the lender as well as a mortgage insurer. A mortgage insurer protects the investment of the lender in case you default on your loan. If you apply for an amount lower or equal to 80%, you won’t need an approval from the mortgage insurer and your chances of approval improve. Morale of the story? Try to save a 20% deposit before applying for a home loan. This will also prove to the financier that you have the
All is not lost if you have a poor credit score. One of our specialised lending consultants can help. Fill out your details to the right and you’ll be one step closer to getting approved for your dream home.