Credit Impaired Home Loans
We understand that life gets in the middle at times, and that this can negatively impact on your credit history.
Traditional lenders struggle with people with bad credit ratings.
If you don’t fit the ideal borrower category for traditional lenders, we may be able to help.
Have Impaired Credit?
Credit Problems? No Problems!
Most lenders that we typically approach for our housing loans, personal loans, bank accounts and credit cards are referred to as prime lenders. These include building societies, credit unions and mortgage managers.
Prime Lending refers to normal lending practices, which have been adopted by these lenders, their mortgage insurers and legislation. Prime lenders have fairly strict and specific criteria for their borrowers, and many people who don’t quite fit into the ‘ideal borrower’ category (for that specific lender) may discover their loan application has been declined.
Should any borrower have a default, judgment or bankruptcy noted on their credit file they can expect difficulties in obtaining the ‘prime’ loans that are available to borrowers with no CRAA problems. For example, a borrower with no credit issues may obtain a housing loan up to 95% of the purchase price with a prime lender, whereas a borrower who was discharged from bankruptcy only one month ago may not be offered a loan at all. Most prime lenders’ policies state that ex-bankrupts must be discharged for a minimum of 1-2 years.
We’ve all heard comments made by banks such as “our mortgage insurers will not approve your loan,” “sorry, your business financials don’t support the loan you require” or “you can’t prove that your deposit was saved over a period greater than 6 months.” Borrowers with defaults, judgments or previous bankruptcies may also experience frustrating knock backs when they try to obtain a loan from a prime lender.
These restrictions on borrowers in the prime lending market have opened a whole new market in this country called sub-prime lending. Sub-prime lending is relatively new to Australia and has opened many new possibilities for borrowers who may not be able to obtain traditional bank finance but are still good credit risks.
Most lenders either specialise in the prime lending market OR they specialise in the sub-prime lending market.
Mortgage Advice Bureau has several sub-prime specialists on its Panel, which gives our clients choices that they would not have if they approached a Lender directly.
So what’s the bottom line? If your loan has been declined, don’t despair…maybe you’re just not in the ‘ideal borrower’ category for that particular lender. For another lender you might be the ‘perfect borrower’!
Contact us to be connected to the right type of mortgage for your needs