How to buy a house with bad credit

By Angela Monroe - November 23, 2018

If you have bad credit but are looking to buy a house, don’t panic. It can be disappointing when you get rejected by a home loan provider, but we’ll help you to find the right lender for your situation.

There are also a number of steps you can take to help yourself and your situation when trying to buy a house with bad credit. So don’t give up on your home loan dreams just because you have bad credit. Finding the right lender for your financial situation could help to get things started and for you to begin the home loan process.

Find out how our expert home loan brokers can help you buy a house with bad credit.

How to buy a house with bad credit

Getting approved for a home loan with bad credit can be difficult, but it’s not impossible. And there are things you can do to improve your chances of getting approved, including:

  • Finding the right lender for your situation
  • Increase your down payment
  • Show evidence that you’ve improved your financial situation

It’s important to review your bad credit and accurately assess your current financial situation. Think about the reasons for your bad credit – is it simply due to some previous missed payments and you’re now back on track? Or perhaps your bad credit is more serious and you’ve been declared bankrupt recently?

Buying a house with bad credit is possible. You need to understand that if you are currently declared bankrupt, you’ll probably need to wait until you’re discharged and in a better financial situation before you apply for a home loan.

Top tips for buying a house with bad credit

Find the right lender

This is really important and will make such a difference when you’re trying to buy a house with bad credit. You need to understand that many of the bigger financial institutions and banks simply won’t offer a home loan to someone with bad credit.

Speak to us today to gain access to a range of lenders who work specifically with people with bad credit and understand what you may need in your situation.

Get organised

You’ll need to have all the required documents available to a potential lender to avoid unnecessary delays. Getting a home loan will require you to have documents including bank statements, proof of a regular income, payslips, and proof of identification and current address.

It’s also really important to be organised in how you budget for your home loan. You should take the time to figure out exactly how much money you’ll need to have each month to pay back the loan, including interest rates and any additional fees.

Increase your down payment

This isn’t possible for everyone, but if there’s a chance that you can put down a larger upfront payment, you may be a more attractive option to lenders. By showing that you can provide a larger down payment, the lender faces less of a risk if you default on the loan repayments.

With a larger down payment, you may be able to avoid lender’s mortgage insurance, as well as paying less in total interest over the loan term.

Never stretch yourself financially or put yourself in a position where you don’t have enough money to make repayments or cover your monthly outgoings. If a larger down payment isn’t available to you, there are other options.

Show evidence of an improved financial situation

Specialist lenders will understand that you may have experienced financial problems in the past but have now improved your financial situation.

If you are able to show evidence of your improved situation, this could really help your chances of being approved for a home loan with bad credit. Have a think about whether you have paid off any loans in full, repaid credit cards, or been up to date and efficient with your rent and utilities.

Any evidence of making regular deposits into a savings account will also help your case.

Look around for the best options

This is something that we can help you with – and we could save you time, money, and a huge amount of stress. We’ve got access to a wide range of lenders who specialise in helping people with bad credit. Let us find the best options for you if you want to buy a house with bad credit.

It’s really important that you don’t make applications to numerous lenders. Each application is recorded on your credit report and could raise alarm bells to potential lenders who may think you’ve been rejected time and time again.

Let us help you

If you provide us with the most honest and accurate information about your financial situation and your bad credit, we can help you to find out whether you’ll be able to buy a house with bad credit. Our years of experience and access to lenders will help you to make the process much more efficient and stress-free.

If you’re wondering how to buy a house with bad credit, we can help. Get help from our bad credit home loan specialists today.

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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