Bad credit: What are your home loan options?

Have you just started a new job? Been late on a few repayments and have a bad credit rating? Are you self-employed? While there are many factors lenders consider when signing you up for a home loan, these are a few reasons many Australians struggle to get into the home owners market.

It’s not all bad news though, if you have ended up with a little black mark next to your credit history or recently started a new job, you do have the option of applying for a bad credit loan, otherwise known as a non-conforming loan, or low doc loan.

What is a non-conforming loan?

Non-conforming loans are set up to assist borrowers who don’t meet the standard lending criteria. This could be due to;

• Missing payments
• Starting a new business
• Having a tax debt
• No job stability
• New Australian resident with no credit history
• Nearing retirement

Your ability to apply and repay a non-conforming loan will be calculated based on your income and borrowing record.

The downside of bad credit

While a non-conforming loan might secure you your dream home it could also come with a few extra grievances that include, requiring a larger deposit and higher interests rates than standard home loans.

If you’d like to cast an eye over your credit rating you can request a free copy of your personal credit report from Australian credit reporting agencies, such as Veda.

It’s not all doom and gloom, just a challenge on the road to the Australian dream. There is only one way to find some of the best home loan options available for your specific circumstances – shop around!

Get started by reading up on bad credit loans, compare home loans and use the mortgage repayment calculator. 

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