Bad Credit Home Loans With No Deposit

By Angela Monroe - August 3, 2018

If you have bad credit and don’t have a deposit saved up. It can be daunting considering getting a home loan. However there’s good news – it is possible to get bad credit home loans without a deposit.

It may be a matter of simply being a bit more creative in your bad credit home loans options, asking for help from parents or close friends, or finding the right lender for your circumstances. Find out how we can help you get a bad credit home loan.

Can I get a home loan with bad credit and no deposit?

Yes. There’s no denying it’ll be harder and you may face higher interest rates, however bad credit home loans with no deposit are possible.

How can you make it possible?

There are a few different ways you can approach bad credit home loans with no deposit.

You could borrow more than 100% of the cost

Borrowing even 105% of the purchase price means that you don’t need any savings. It’s important however that you budget strictly to ensure that you can pay back this amount – be aware that getting yourself into more debt could seriously affect your ability to borrow in the future. If you do decide to borrow more than 100% of the cost of the home, you will need a guarantor to secure this.

Receiving a gift for your deposit

This is a great option if you have parents or a very close friend who is able to help. It’s very common too – almost three quarters of first time buyers receive some help from their parents, often around 5 to 15% of the purchase price. Getting a deposit could help you get a home loan despite bad credit.

Using a personal loan as a deposit

This works well if you have a high income and do not struggle to get a personal loan. To do this you’ll also need to have a clear credit history. Remember that even if you do borrow the money for a deposit and it’s accepted by a lender, you’ll need additional money for costs such as conveyancing and taxes.

Using equity in a second property

If you’re lucky enough to already own a property, it could help you get a bad credit home loan with no deposit. Ask for a property valuation and find out whether the calculations add up and you can use existing equity as a deposit.

Avoiding traps of bad credit home loans with no deposit

If you have bad credit and no deposit, you need to seriously question whether you should apply for a home loan in the first place. Many people get carried away with wanting to purchase a home, even if they are simply not in a financial situation to do so.

Be very careful about over borrowing – even if you do manage to get a bad credit home loan with no deposit, you need to be 100% sure that you can pay it back to avoid defaulting on the loan and jeopardising any future chances of borrowing.

Watch out for interest rates – it’s really important that you seek expert advice when applying for a bad credit home loan with no deposit. We have years of experience dealing with these types of loans, so we can advise you as to when rates are too high as well as letting you know what to expect.

Remember there will be other costs. It’s no use tying up all of your money in your bad credit home loan. You’ll still have regular monthly outgoings and there are also a lot of extra costs surrounding a home purchase such as conveyancing, taxes, and insurance.

The next steps

We are fully aware that you want to get your home loan approved as quickly as possible. We’ll always try and help to ensure you have a speedy and efficient process.

When it comes to bad credit home loans with no deposit, we also want to ensure that this is the right step for you. Speak to us today to find out the best options for you and allow us to advise you on the best way to move forward with getting a bad credit home loan.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.

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