Bad Credit Home Loans – Frequently Asked Questions

Your questions answered

Are you looking for your first home and concerned about getting a home loan with poor credit history? Perhaps you’re looking to refinance your home loan? Many people with bad credit become disillusioned with the home loan process especially after numerous rejections and unsuccessful applications.

Bad credit home loans aren’t always easy, and the process can be very confusing. But we’re here to make things easier for you. Check out our frequently asked questions and get the answers you need or contact us today for advice.

Do you have bad credit?

Most people will know if they have bad credit, but if you don’t it’s important to check your credit score before you start to apply for a home loan.

Some of the reasons you may have bad credit could include:

  • Unpaid bills or loans in the past
  • Previous bankruptcy
  • Exceeding your credit card limit
  • Credit file with too many credit checks
  • No credit record

What is a bad credit home loan?

Bad credit home loans are specific home loan products designed for people with a poor credit history. People who use a bad credit home loan may have been rejected by banks or lenders for traditional home loans and will need to look at specific lenders who work with people who have bad credit.

How long does it take to get a bad credit home loan?

At Loans for People with Bad Credit, we have access to a wide range of lenders as well as experience working with people with bad credit. This means that we can help you to get a bad credit loan much quicker than if you attempt to do this by comparing lenders online and working through the lists yourself.

Generally, we aim to help you get approval for your bad credit home loan within seven working days. This means that you could have the funds you’ve been waiting for much sooner than you thought.

How long will I have to pay off my bad credit home loan?

This is something you’ll need to consider by taking into account your financial circumstances and how much cash you have available to make repayments each month. It’s really important that you choose a bad credit home loan with repayments which you can afford to pay in full each month. Never stretch yourself financially as you could risk defaulting on your loan and damaging your credit further.

Usually, loan terms for bad credit home loans can be up to 40 years. If you’re unsure about which option works best for you, we’re happy to talk through your circumstances with you and direct you to some of the bad credit home loans that could be suitable.

What are the different bad credit home loan types?

Not all bad credit home loans are the same, and it’s worth doing a bit of research to understand the differences between them and to figure out which one may suit your needs. Whether you’re looking to buy your first home, but don’t have a credit record, or you’re looking to refinance your current home, there are options out there for you.

Some of the bad credit home loans available include:

  • First home buyers loan
  • Home refinancing loan
  • Investment property loan
  • Debt consolidation loan

What documents do I need for a bad credit home loan?

Having the right documentation is really important for the bad credit home loan application process. You’ll need to gather these together before you start the process and ensure that you have everything you need as otherwise, you could cause unnecessary delays.

Some of the documents required include:

  • Bank statements
  • Pay slips
  • Tax returns
  • Proof of address
  • Proof of residency

In the case of bad credit home loans, it can also be helpful to show evidence of paid bills or loans in the past, as well as offering character or employment references.

Do I need a guarantor for a bad credit home loan?

No, it’s not essential for you to have a guarantor for your bad credit home loan and it’s possible to be approved without having one.

But it is worth considering a guarantor, as this will reduce the risk level the lender faces when offering you a bad credit home loan, and could reduce the interest rate and fees that they give you. A guarantor offers the lender the security and peace of mind that if you default on your loan, they will still have the agreed amount paid back to them.

Will I have to get a high interest rate with a bad credit home loan?

Generally, bad credit home loans have higher risks than other types of home loans. This is because you are seen as more of a risk to the lender when borrowing money, so they’ll ask for more interest to compensate.

If you have specific reasons for your bad credit or can show that you are now in a better financial position, it’s worth talking to your lender as this could lead to them reducing interest rates on your bad credit home loan.

How much do I need for a deposit?

A larger deposit certainly helps if you’re applying for a bad credit home loan. This will help to reduce the amount of money that you’re asking the lender for.

We understand that many people with bad credit do not have a big deposit and we have access to specialist lenders who can loan up to 90% of the total value of the home.

What happens if my partner has bad credit?

If you are making a joint application for a home loan, your partner’s bad credit will affect your overall credit score. You may want to consider other ways to apply for a bad credit home loan rather than letting their poor financial history affect your home loan.

We can talk you through the options, such as taking on the debt and the ownership alone or delaying your property purchase until your partner can improve their credit score.

Get started with a bad credit home loan

If we haven’t answered all your questions, then get in touch with us and we will be happy to help. Get your home loan application started today. Find out how we can help you get the right bad credit home loan for you, call us on 1300 769 384.