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Finding suitable mortgage lenders for discharged bankrupts
Recovering from bankruptcy is tedious; you never know how long it will take before returning to a more stable financial life. During this time, thinking of getting another loan might even seem futile. However, there's still hope, thanks to mortgage companies that deal with bankruptcies.
The process of getting a mortgage after bankruptcy can be a bit more time consuming than as a standard borrower, but it can be done with the right information. If you want to apply for a loan to buy or build a home, or for other purposes, you might want to know how long it will take to apply, which companies offer mortgages for borrowers who have discharged bankruptcy, and what property types can a discharged bankrupt buy.
Can I apply for a mortgage after my bankruptcy ends?
Yes, you can. However, you must know that the process won't be as straightforward as before you declared bankruptcy. This is because bankruptcy stays on your credit report for up to seven years, leaving a negative impact on your credit score. A low score translates to fewer options when it comes to getting a home loan. That's when knowing the mortgage lenders who lend to discharged bankrupts helps.
Which companies offer mortgages for discharged bankrupts?
Depending on where you live or are looking to purchase, you can choose from various lenders. Here are just some of the mortgage lenders for bankrupts across Australia:
Savvy
Founded in 2010, Savvy is a mortgage broker that helps you find finance for a range of purposes such as for a vehicle, home or other personal reasons. When offering financial help to people with bad credit, this mortgage broker equips you with information needed to make an appropriate financial decision.
Pepper Money
Pepper Money has been helping Aussies achieve their lending goals since 2000. Pepper Money is a specialist lender that assists borrowers with bad credit. Pepper Money can talk with you one-on-one to learn more about your situation and provide suitable loan options.
Redrock Group
An award-winning specialist finance company, Redrock Group has helped thousands of Australians achieve their financial goals. They offer bad credit loans that can be tailored to meet your credit history and requirements.
Liberty
Liberty has offer flexible solutions that aren't readily available from other financial institutions. Its 'out of the box' service focuses on creating tailored loan solutions to match your personal circumstances.
Are mortgages for discharged bankrupts any different than regular home loans?
Getting a home loan isn't the easiest for a discharged bankrupt as you need to source specialist lenders. You’ll often find that you’ll also be charged higher fees, including application fees and ongoing monthly fees.
In addition, your loan will likely have a higher rate of interest than what might be offered or advertised to someone who hasn’t gone through bankruptcy. However, that shouldn't stop you from comparing the rates from the lenders on offer before choosing a lender.
Another difference you’ll find is the Loan to Value Ratio (LVR). Most mortgages offered to borrowers with bad credit will have lower LVRs, meaning you might have to pay a larger deposit for a bad credit loan compared to a regular mortgage. It’s best to consult with a financial specialist to understand the exact amount you'll have to pay towards your loan.
How do I apply for a loan as a discharged bankrupt?
Before you can start applying for a home loan, you may want to work on saving a big deposit and having a clean credit history. Even basic things like paying your utility bills on time can help you improve your credit score.
Next, do your research and compare various mortgage lenders for discharged bankrupts in Australia. Remember, each lender has a unique policy regarding loan applications. Not knowing which one to approach can increase your chances of your application getting denied. The more rejections you receive, the greater the negative impact on your credit history. So, try to find a lender that understands your situation and is willing to provide the best financial assistance. Or you could speak to a mortgage broker about your circumstances and requirements, and they can help you find the right lender for you.
Disclaimer
This article is over two years old, last updated on July 23, 2021. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.
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