• Bad credit loans
• Bad credit mortgages
• Bad credit history home loans
• Credit impaired home loans
• Non-conforming home loans
• Non-conforming mortgages
• Credit impaired home loans
• Specialist loans

Bad credit loans are mortgages for borrowers who may have circumstances which mean they do not meet the requirements of the normal banks and lenders.

Mortgage arrears

This is where you have missed a payment(s) on your mortgage or home loan. Lenders will be more wary the greater the number of mortgage payments you have missed in the recent past. 

Typically, normal banks and lenders reject home loan applications or mortgage refinance applications even if you have only missed one repayment!

Bad credit history

Adverse listings on you credit file (e.g. your Veda Advantage credit file) such as loan defaults, bankruptcy, adverse court judgments, court writs or too many loan / credit enquiries on your can make normal banks and lenders unlikely to lend to you.

Credit history with the lender

Your past credit history with the lender you are applying for can impact your application. If you have had a problem with the lender in the past they are less likely to approve a further loan application.

Unpaid bills or unpaid tax debt

Unpaid bills such as council rates or late tax bills are types of bad credit history that usually do not show up on your credit file. However, these can be seen by the lender on the supporting documents you may need to provide to them.

Over committed

If you have too much debt for your income or your total liabilities are greater than you total assets then many banks and lenders will assess you as being insolvent and will not lend to you.

In many cases there is a valid reason why you have bad credit.

Bad credit home loans are generally for borrowers who may have:

• Adverse credit history
• Existing home loan arrears or defaults
• Credit card arrears or defaults
• Personal loan arrears or defaults
• Too many debts and are finding it difficult to consolidate
• Have been declined by another lender

Banks and lenders are cautious of people who have had defaults or credit problems. Generally, the more serious the issues the less loan options are available and the more restrictive the loan conditions and interest rate and or fees will be.

If you have a small default for less than $500 and that has been paid more than six months ago.

We may be able to help you borrow up to:

• 90% of the property value (loan to value ratio LVR); or
• in some cases up to 95% LVR.

If you are purchasing a property then you must have at least 5% in genuine savings.
No other policy exceptions are allowed.
You must have a very good reason for your bad credit history.

Other criteria also apply such as your income amount and ability to make the loan repayments, the type of property and its location among other things.

If you have less than $500 in paid defaults from non-financial institutions (phone and utility – power, gas, water companies) and less than $1,000 in paid defaults from financial institutions (banks and lenders).

We may be able to help you borrow up to:

• 85% of the property value; or
• in some cases 90% of the property value.

If you are purchasing a property then you must have at least 5% in genuine savings.
No other policy exceptions are allowed.
You must have a very good reason for your bad credit history.

Other criteria also apply such as your income amount and ability to make the loan repayments, the type of property and its location among other things.

If you have up to $3,000 in paid defaults.

We may be able to assist you to borrow up to:

• 80% of the property value with a with interest rates similar to good credit borrowers; or
• 90% of the property value with a specialist lender, interest rates may be higher; or
• 100% of the property value if you have a security guarantee from your parents (this is where your parents offer property they own as security against you defaulting on the loan).

Other criteria also apply such as your income amount and ability to make the loan repayments, the type of property and its location among other things.

If you have a larger default that has been paid from $3,000 to $500,000 you can be considered on a case by case basis. You will need to have a very good explanation and back it up with strong evidence.

In this case we may be able to help you borrow up to 90% of the property value with a specialist lender.

If you have any unpaid defaults then you may be able to borrow up to 90% of the property value with a specialist lender. You will need to pay the defaults before the loan is approved for purchases or from the loan when refinancing.

If you have judgements or court writs then we may be able to help you borrow up to 90% of the property value, with a specialist lender.

We may be able to help you to refinance your current mortgage to pay out your part 9 agreement. However, you must have been in the part 9 agreement for a minimum of 12 months and your repayments for the agreement & existing home loan must be perfect.

We may be able to assist you if your bankruptcy has been discharged. In this case you may be able to borrow up to 95% of the property value, with a specialist lender.

Find out more about home loans with a discharged bankruptcy here:

We may able be able to help self-employed borrowers that cannot prove their income with financials and tax returns and need a low doc home loan.

In some cases, we can help people in start-up businesses who have had an ABN that has been active or GST registered for less than 2 years.

We may be able to help you to get a low doc home loan even when you have an unpaid default, mortgage arrears, judgement and even a discharged bankruptcy.

Typically, you will need to sign an income declaration or provide an accountants letter to prove your income.

In the case of low doc bad credit home loans we may be able to help you borrow up to 60% of the property value. In some cases where your financial position is stronger we may be able to assist you to borrow up to 80% of the property value.

Low doc bad credit home loans usually have a higher interest rate.

What are the advantages of debt consolidation?

By consolidating all of your debts into one repayment each month it will be easier to manage your repayments (than multiple payments coming at different times) and it should reduce your overall repayments.

By having one lower payment it can help you to be able to meet your repayments and prevent further damage to your credit history / credit file. In many cases it can stop the bank from repossessing your home.

What are possible disadvantages of a bad credit debt consolidation?

A possible downside of bad credit debt consolidation loan is that you may have to pay a higher interest rate on your home loan.

However, overall your repayments will usually be lower. If the majority of your debt is at a lower rate than a bad credit home loan then it may not be an advantage to use it.

If you do get into financial trouble again in the future when you have a bad credit home loan then the lender normally takes legal action against you faster than if you have a normal home loan.

We strongly recommend that you make your home loan repayments on time, every time.

If you have had a few credit mishaps and still want to get a construction loan then you are still in luck.  Some lenders will still accept you for a construction loan if you have bad credit. This includes an unlimited number of defaults, judgments and writs up to $1,000 (paid or unpaid) or more on a case by case basis.

This could be a great option for those looking to build their dream home but fall outside the lending guidelines of the standard banks and lenders due to bad credit issues and wouldn’t usually qualify for a construction loan.

Other lending criteria, including maximum loan to value ratios, your incomes and your ability to repay the loan considering your other liabilities and expenses and other conditions apply for this type of bad credit construction loan.

Note that you should expect that the interest rate for borrowers with bad credit will be higher than a standard construction loan and higher loan to value ratios can incur higher interest rates.

 Bad credit construction loans

However, the interest rates that are offered reflect the risk to the lender. Therefore, if the lender assesses you as higher risk they will charge you a higher interest rate.

Specialist lenders will assess your bad credit home loan application on a case by case basis and consider your explanation about why you have bad credit and why you need debt relief.

These lenders can often rapidly approve bad credit home loans to meet deadlines from your creditors.

The worse your credit history, the higher the risk the lender will consider you and more limited your options will be and the higher interest rates will be.

Typically, bad credit home loans are priced based on:

1. How long ago the credit defaults were listed on your credit file / credit report. The more recent the credit problems the worse it looks to the lender.
2. If you have paid, settled or unpaid defaults/judgments at the time of application. The lender will look more favorably on your application if you have paid rather than unpaid defaults.
3. The type of the defaults of judgments. Generally phone bills, power bills, water bills, gas bills or other utility related defaults are less severe than bank or financial institution related default listings.
4. The proportion of the property value (loan to value ratio – LVR) that you are applying to borrow. If the proportion of property value that you are applying to borrow is low it is lower risk for the lender and the interest rate is also typically lower.
5. Your income situation. Applicants with proof of sufficient income are considered lower risk. If you have stable employment and can provide sufficient evidence (such as pay slips and group certificates) you will be considered as lower risk and receive a lower interest rate all other things being equal. If you are self-employment without the required financials you will be considered higher risk and be charged a higher interest rate all other things being equal.

• Vacant land
• Construction loans
• Properties over 5 acres in size.

To do this, borrowers can obtain a copy of their credit report, from VEDA Advantage. It is a good idea to check your credit file because:

You will know exactly what is on your credit report before applying for credit.

If you have some defaults or judgements that are incorrect listed on your file you can have them removed before you apply for a loan.

If you have any unpaid defaults or judgements that are not errors you should pay them off if you can.

If you provide us with a current copy of your credit report we can provide an accurate loan assessment and relevant advice in relation to your bad credit mortgage options prior to making an application.

Click here to get a free copy of your VEDA credit file.

Oak Laurel mortgage brokers have specialist that can help you get a good result when applying for a bad credit home loan.

At Oak Laurel mortgage brokers we believe that a bad credit home loan should not be a long term solution for you. Rather, a bad credit home loan can be a solution that can stop you losing your home or get you into the housing market earlier if you have bed credit.

Due to stamp duty, real estate agent fees, conveyancing and other costs, it can often be cheaper to pay a higher interest rate for a short time than to sell your home and then buy a new one later. The cost of selling then buying is often 8% or more of the property value.

In a rising market, waiting longer (for your credit file to clear) to purchase a property can mean that you may need to pay a higher price for the property. Paying a higher interest and buying earlier may be a better option financially.

Though bad credit home loans can have a loan term of up to 25 or 30 years, our goal is to get you out of the bad credit loan as soon as possible. Once your credit file is clear again typically after about 2 – 3 years we can assist you to switch to a lower interest rate.

Often we can help even when others have said ‘NO’.

Depending on the severity of your bad credit history the loan may be approved with interest rates similar to borrowers with no credit problems.

Contact Oak Laurel to get a free assessment about your bad credit home loan options.