RateCity.com.au
  1. Home
  2. Home Loans
  3. Articles
  4. Bad credit: What are your home loan options?

Bad credit: What are your home loan options?

RateCity avatar
RateCity
- 2 min read
Bad credit: What are your home loan options?

Have you just started a new job? Been late on a few repayments and have a bad credit rating? Are you self-employed? While there are many factors lenders consider when signing you up for a home loan, these are a few reasons many Australians struggle to get into the home owners market.

It’s not all bad news though, if you have ended up with a little black mark next to your credit history or recently started a new job, you do have the option of applying for a bad credit loan, otherwise known as a non-conforming loan, or low doc loan.

What is a non-conforming loan?

Non-conforming loans are set up to assist borrowers who don’t meet the standard lending criteria. This could be due to;

  • Missing payments
  • Starting a new business
  • Having a tax debt
  • No job stability
  • New Australian resident with no credit history
  • Nearing retirement

Your ability to apply and repay a non-conforming loan will be calculated based on your income and borrowing record.

The downside of bad credit

While a non-conforming loan might secure you your dream home it could also come with a few extra grievances that include, requiring a larger deposit and higher interests rates than standard home loans.

If you’d like to cast an eye over your credit rating you can request a free copy of your personal credit report from Australian credit reporting agencies, such as Veda.

It’s not all doom and gloom, just a challenge on the road to the Australian dream. There is only one way to find some of the best home loan options available for your specific circumstances – shop around!

Get started by reading up on bad credit loans, compare home loans and use the mortgage repayment calculator

Disclaimer

This article is over two years old, last updated on July 1, 2009. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.

Compare home loans in Australia

Product database updated 29 Mar, 2024