Can you Get a Mortgage with Bad Credit?

by Rae E. Non Conforming Loans

Buying a Home is now simple for Applicants with Bad Credit. Use these simple steps to qualify for Bad Credit Mortgages.

Get yourself a free copy of your credit report. If you have been declined from your bank for your credit history or credit score it is important to get a copy of your credit report. You can obtain a copy of your report for free from Equifax. Check the report carefully. You are able to dispute the errors that you find on your credit report. To do so, you need to contact the credit provider who has placed the default on your report and provide the necessary evidence to have the default removed. It is best to wait in applying for a mortgage until this is done. If however the report is correct, you now understand your situation and can decide what to do next.
If the Defaults are under $1,000 repay your outstanding default first. Do not try to look for a Prime home-loan while you still have unpaid defaults.
Do your homework before choosing to apply. Every home loan application that you make leaves a mark on your credit report. Lenders do not like to approve loans to people who have excessive credit report activity. Therefore research without applying first and only once you know what you want, then make a single application to the lender of your choice.
Defaults and Judgement’s stay on your credit report for up to five years after being paid. While some lenders offer Bad Credit Mortgages with 5% deposit he interest rate that you can be charged on these is today around 8% > 9%. They also come with very hefty fees and early repayment penalties. In order to qualify for a good value bad credit mortgage, you need to have at least 20% deposit plus funds towards stamp duty on purchase and other purchasing costs. This is a substantial amount of money and you need to be very disciplined and responsible in order to save a deposit. However unless you can discipline yourself to do this, you will not be able to take on the obligation of Mortgage Repayments.
Clean your credit over several years and refinance to a traditional Mortgage. Given that a mortgage for bad credit is usually a little more expensive than a traditional home loan, it is important to do all you can in order to refinance to a traditional home loan ASAP. Providing you maintain a clean credit history with your new mortgage, once your default fall off your credit report you can re-apply to any traditional lender for a Prime Credit Mortgage. You need to be very diligent, paying all your bills as they fall due in order to avoid a repeat problem.

If you are an Aussie who has bad credit and you are investigating your options with Bad Credit Mortgages please talk to an experienced Bad Credit Mortgage Broker before making any decision, as the wrong decision could prove to be very costly.